Exhibit 10(y)
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CREDIT, SECURITY, GUARANTY AND PLEDGE AGREEMENT
DATED AS OF OCTOBER 1, 2002
AMONG
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
AS BORROWER
AND
THE GUARANTORS REFERRED TO HEREIN
AND
THE LENDERS REFERRED TO HEREIN
AND
WACHOVIA BANK, NATIONAL ASSOCIATION
AS ADMINISTRATIVE AGENT, COLLATERAL AGENT AND ISSUING BANK
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TABLE OF CONTENTS
PAGE
PARTIES............................................................................................................................1
INTRODUCTORY STATEMENT.............................................................................................................1
1. DEFINITIONS.............................................................................................................2
2. THE LOANS..............................................................................................................28
SECTION 2.1 Loans.........................................................................................28
SECTION 2.2 Disbursement of Funds and Notice of Borrowing.................................................29
SECTION 2.3 Interest Rate Type of the Loans...............................................................30
SECTION 2.4 Repayment; Evidence of Debt; Administration...................................................30
SECTION 2.5 Interest......................................................................................31
SECTION 2.6 Commitment Fees and Other Fees................................................................31
SECTION 2.7 Termination and/or Reduction of the Total Commitment..........................................32
SECTION 2.8 Voluntary Prepayments.........................................................................32
SECTION 2.9 Mandatory Prepayments.........................................................................32
SECTION 2.10 Default Interest; Alternate Rate of Interest..................................................34
SECTION 2.11 Continuation and Conversion of Loans..........................................................35
SECTION 2.12 Reimbursement of Lenders......................................................................36
SECTION 2.13 Change in Circumstances.......................................................................37
SECTION 2.14 Change in Legality............................................................................39
▇▇▇▇▇▇▇ ▇.▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Withholding.....................................................................40
SECTION 2.16 Interest Adjustments..........................................................................42
SECTION 2.17 Manner of Payments............................................................................42
SECTION 2.18 Letters of Credit.............................................................................43
3. REPRESENTATIONS AND WARRANTIES OF CREDIT PARTIES.......................................................................48
SECTION 3.1 Existence and Power...........................................................................48
SECTION 3.2 Authority and No Violation....................................................................49
SECTION 3.3 Governmental Approval.........................................................................49
SECTION 3.4 Binding Agreements............................................................................50
SECTION 3.5 No Material Adverse Effect....................................................................50
SECTION 3.6 Financial Information.........................................................................51
SECTION 3.7 Credit Parties and their Subsidiaries.........................................................51
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TABLE OF CONTENTS
(continued)
PAGE
SECTION 3.8 Patents, Trademarks, Copyrights and Other Rights..............................................51
SECTION 3.9 Fictitious Names..............................................................................52
SECTION 3.10 Title to Properties...........................................................................52
SECTION 3.11 Special Representations Relating to Eligible Account Receivables..............................53
SECTION 3.12 Litigation; Judgments.........................................................................53
SECTION 3.13 Federal Reserve Regulations...................................................................54
SECTION 3.14 Investment Company Act........................................................................54
SECTION 3.15 Taxes.........................................................................................54
SECTION 3.16 Compliance with ERISA.........................................................................54
SECTION 3.17 Agreements....................................................................................55
SECTION 3.18 Security Interest.............................................................................55
SECTION 3.19 Disclosure....................................................................................56
SECTION 3.20 Environmental Matters.........................................................................56
SECTION 3.21 Pledged Securities............................................................................57
SECTION 3.22 Compliance with Laws..........................................................................58
SECTION 3.23 Projected Financial Information...............................................................58
SECTION 3.24 Real Property.................................................................................59
SECTION 3.25 No Default....................................................................................59
SECTION 3.26 Labor Matters.................................................................................59
SECTION 3.27 Organizational Documents......................................................................59
SECTION 3.28 Bank Accounts.................................................................................59
4. CONDITIONS TO THE EFFECTIVENESS OF THIS CREDIT AGREEMENT AND THE MAKING OF THE LOANS...................................59
SECTION 4.1 Conditions Precedent to the Effectiveness of This Credit
Agreement and the Making of the Loans.........................................................59
SECTION 4.2 Conditions Precedent to Each Loan and each Letter of Credit...................................64
5. AFFIRMATIVE COVENANTS..................................................................................................65
SECTION 5.1 Financial Statements and Reports..............................................................65
SECTION 5.2 Compliance with Laws..........................................................................68
SECTION 5.3 Maintenance of Properties.....................................................................68
ii
TABLE OF CONTENTS
(continued)
PAGE
SECTION 5.4 Notice of Material Events.....................................................................69
SECTION 5.5 Insurance.....................................................................................69
SECTION 5.6 Books and Records.............................................................................70
SECTION 5.7 Observance of Agreements......................................................................71
SECTION 5.8 Taxes and Charges.............................................................................71
SECTION 5.9 Liens.........................................................................................71
SECTION 5.10 Further Assurances; Security Interests........................................................71
SECTION 5.11 Environmental Laws............................................................................72
SECTION 5.12 Subsidiaries..................................................................................73
SECTION 5.13 Lease Agreements..............................................................................73
SECTION 5.14 After-Acquired Real Property Assets...........................................................73
SECTION 5.15 Lender Meetings...............................................................................74
SECTION 5.16 Cash Management System........................................................................74
SECTION 5.17 Subordination, Non-Disturbance and Attornment Agreements, Etc.................................74
SECTION 5.18 ERISA Plan Compliance and Reports.............................................................74
SECTION 5.19 Leases........................................................................................75
SECTION 5.20 Post Closing Matters..........................................................................75
6. NEGATIVE COVENANTS.....................................................................................................75
SECTION 6.1 Limitations on Indebtedness and Preferred Stock...............................................75
SECTION 6.2 Limitations on Liens..........................................................................77
SECTION 6.3 Limitation on Guaranties......................................................................79
SECTION 6.4 Limitations on Investments....................................................................79
SECTION 6.5 Restricted Payments...........................................................................80
SECTION 6.6 Limitation on Leases..........................................................................80
SECTION 6.7 Merger, Sale of Assets, Purchases, etc........................................................81
SECTION 6.8 Places of Business; Change of Name............................................................82
SECTION 6.9 Limitations on Capital Expenditures...........................................................82
SECTION 6.10 Minimum Consolidated EBITDA...................................................................82
iii
TABLE OF CONTENTS
(continued)
PAGE
SECTION 6.11 Maximum Total Leverage Ratio..................................................................83
SECTION 6.12 Minimum Consolidated Fixed Charge Coverage Ratio..............................................83
SECTION 6.13 Minimum Consolidated Tangible Net Worth.......................................................84
SECTION 6.14 Transactions with Affiliates..................................................................84
SECTION 6.15 Business Activities...........................................................................84
SECTION 6.16 Joint Ventures or Partnerships................................................................84
SECTION 6.17 Eligible Account Receivables..................................................................84
SECTION 6.18 Sale and Leaseback............................................................................85
SECTION 6.19 Changes to Credit and Collection Policy and Material Agreements...............................85
SECTION 6.20 ERISA Compliance..............................................................................85
SECTION 6.21 Hazardous Materials...........................................................................85
SECTION 6.22 Use of Proceeds of Loans......................................................................86
SECTION 6.23 Fiscal Year; Fiscal Quarter...................................................................86
SECTION 6.24 Liquidity.....................................................................................86
7. EVENTS OF DEFAULT......................................................................................................86
8. GRANT OF SECURITY INTEREST;REMEDIES....................................................................................89
SECTION 8.1 Security Interests............................................................................89
SECTION 8.2 Use of Collateral.............................................................................90
SECTION 8.3 Cash Management System........................................................................90
SECTION 8.4 Credit Parties to Hold in Trust...............................................................90
SECTION 8.5 Collections, etc..............................................................................90
SECTION 8.6 Possession, Sale of Collateral, etc...........................................................91
SECTION 8.7 Application of Proceeds on Default............................................................92
SECTION 8.8 Power of Attorney.............................................................................92
SECTION 8.9 Financing Statements, Direct Payments.........................................................93
SECTION 8.10 Further Assurances............................................................................93
SECTION 8.11 Termination and Release.......................................................................93
SECTION 8.12 Remedies Not Exclusive........................................................................94
SECTION 8.13 Continuation and Reinstatement................................................................94
iv
TABLE OF CONTENTS
(CONTINUED)
PAGE
9. GUARANTY...............................................................................................................94
SECTION 9.1 Guaranty......................................................................................94
SECTION 9.2 No Impairment of Guaranty, etc................................................................95
SECTION 9.3 Continuation and Reinstatement, etc...........................................................95
SECTION 9.4 Limitation on Guaranteed Amount etc...........................................................96
10. PLEDGE.................................................................................................................96
SECTION 10.1 Pledge........................................................................................96
SECTION 10.2 Covenant......................................................................................97
SECTION 10.3 Registration in Nominee Name; Denominations...................................................97
SECTION 10.4 Voting Rights; Dividends; etc.................................................................97
SECTION 10.5 Remedies Upon Default.........................................................................98
SECTION 10.6 Application of Proceeds of Sale and Cash......................................................99
SECTION 10.7 Securities Act, etc...........................................................................99
SECTION 10.8 Continuation and Reinstatement..............................................................100
SECTION 10.9 Termination.................................................................................100
11. CASH COLLATERAL......................................................................................................101
SECTION 11.1 Cash Collateral Account.....................................................................101
SECTION 11.2 Investment of Funds.........................................................................101
SECTION 11.3 Grant of Security Interest..................................................................101
SECTION 11.4 Remedies....................................................................................102
12. THE AGENTS AND THE ISSUING BANK......................................................................................102
SECTION 12.1 Administration by the Agents................................................................102
SECTION 12.2 Advances and Payments.......................................................................103
SECTION 12.3 Sharing of Setoffs and Cash Collateral......................................................103
SECTION 12.4 Notice to the Lenders.......................................................................104
SECTION 12.5 Liability of the Administrative Agent, Collateral Agent and the Issuing Bank................104
SECTION 12.6 Reimbursement and Indemnification...........................................................106
SECTION 12.7 Rights of the Agents........................................................................106
SECTION 12.8 Independent Investigation by Lenders........................................................107
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TABLE OF CONTENTS
(continued)
PAGE
SECTION 12.9 Agreement of the Lenders....................................................................107
SECTION 12.10 Notice of Transfer..........................................................................107
SECTION 12.11 Relations Among Lenders.....................................................................107
SECTION 12.12 Successor Agents............................................................................107
SECTION 12.13 Tenant's Quiet Enjoyment....................................................................108
SECTION 12.14 Lender Payments.............................................................................108
13. MISCELLANEOUS........................................................................................................109
SECTION 13.1 Notices.....................................................................................109
SECTION 13.2 Survival of Agreement, Representations and Warranties, etc..................................110
SECTION 13.3 Successors and Assigns; Syndications; Loan Sales; Participations............................110
SECTION 13.4 Expenses; Documentary Taxes.................................................................113
SECTION 13.5 Indemnity...................................................................................114
SECTION 13.6 CHOICE OF LAW...............................................................................115
SECTION 13.7 WAIVER OF JURY TRIAL........................................................................115
SECTION 13.8 WAIVER WITH RESPECT TO DAMAGES..............................................................115
SECTION 13.9 No Waiver...................................................................................116
SECTION 13.10 Extension of Payment Date...................................................................116
SECTION 13.11 Amendments, etc.............................................................................116
SECTION 13.12 Severability................................................................................117
SECTION 13.13 SERVICE OF PROCESS..........................................................................117
SECTION 13.14 Headings....................................................................................118
SECTION 13.15 Execution in Counterparts...................................................................118
SECTION 13.16 Subordination of Intercompany Indebtedness, Receivables and Advances........................118
SECTION 13.17 Confidentiality.............................................................................119
SECTION 13.18 Entire Agreement............................................................................119
SECTION 13.19 Enforcement of Rights; No Obligation to ▇▇▇▇▇▇▇▇ Assets.....................................120
SECTION 13.20 Reproduction of Documents...................................................................120
SECTION 13.21 Right of Set-Off............................................................................120
vi
Schedules
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2.9(c) Assets to be Sold to Trusts Post-Closing
2.18 Existing Letters of Credit
3.1(a) List of jurisdictions where each Credit Party is organized
and qualified
3.7(a) Credit Parties and Subsidiaries Information
3.7(b) Beneficial Interests in Persons other than a Credit Party
3.7(c) Joint Venture and Partnership Interests
3.8(a) Proprietary Rights
3.8(b) Claims and Proceedings Against Proprietary Rights
3.9 Fictitious Names
3.10(a) Title to Properties
3.10(c) Condemnation Proceedings
3.10(d) Rights of First Refusal/Option Rights
3.12(a) Litigation
3.15 Taxes
3.17(b) Agreements
3.18(a) Filing Offices for UCC-1 Financing Statements
3.20 Environmental Matters
3.21(a) Pledged Securities
3.24(a) Owned Real Property Assets
3.24(b) Leased Real Property Assets
3.26 Labor Matters
3.28 Bank Accounts
4.1(c) Local Counsel Opinions
5.20 Ancillary Real Property Assets
6.1 Existing Indebtedness
6.2(d) Existing Liens
6.3(f) Certain Guaranties by Borrower
6.4(d) Existing Investments
8.3(b) Concentration Accounts
vii
Exhibits
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A Form of Assignment and Acceptance
B-1 Form of Borrowing Certificate
B-2 Form of Borrowing Base Certificate
C Form of Instrument of Assumption and Joinder
D Form of Mortgage
E Form of Note
F Form of Closing Certificate
G Form of Intercreditor and Collateral Agency Agreement
H Form of Contribution Agreement
I Form of Patent Security Agreement
J Form of Trademark Security Agreement
K Form of Account Control Agreement
viii
CREDIT, SECURITY, GUARANTY AND PLEDGE
AGREEMENT, dated as of October 1, 2002
(as this agreement may be further
amended, supplemented or otherwise
modified, renewed or replaced from
time to time, the "Credit Agreement"),
among (i) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc., a
Delaware corporation (the "Borrower");
(ii) the Guarantors referred to
herein; (iii) the Lenders referred to
herein; and (iv) Wachovia Bank,
National Association as Administrative
Agent, Collateral Agent and Issuing Bank.
INTRODUCTORY STATEMENT
----------------------
All terms not otherwise defined above or in this Introductory
Statement are as defined in Article 1 hereof or as defined elsewhere herein.
Subject to and upon the terms and conditions set forth herein,
the Lenders are willing to make available to the Borrower a senior secured
facility consisting of Loans in the amount of up to $25,000,000 (including a
Letter of Credit subfacility in the amount of up to $10,000,000).
To provide assurance for the repayment of the Loans hereunder and
the other Obligations (as such term is hereinafter defined) of the Borrower
hereunder, the Borrower will, among other things, provide or cause to be
provided to the Collateral Agent, for the benefit of the Secured Parties, the
following (each as more fully described herein):
(i) a guaranty of the Obligations by each of the Guarantors pursuant to
Article 9 hereof;
(ii) a security interest in the Collateral from each of the Credit Parties
pursuant to Article 8 hereof;
(iii) a pledge by each of the Pledgors of the Pledged Collateral owned by it
pursuant to Article 10 hereof; and
(iv) a Mortgage with respect to certain Real Property Assets owned or leased
by the Credit Parties.
Subject to the terms and conditions set forth herein, the
Administrative Agent is willing to act as administrative agent for the Lenders,
the Collateral Agent is willing to act as collateral agent for the Lenders, the
Issuing Bank is willing to issue Letters of Credit as provided herein, and each
Lender is willing to make Loans and to participate in Letters of Credit to the
Borrower as provided herein, in an aggregate principal amount at any one time
outstanding not in excess of the Total Commitments hereunder.
Accordingly, the parties hereto hereby agree as follows:
1
1. DEFINITIONS
For the purposes hereof unless the context otherwise requires,
all references to Sections, Exhibits and Schedules shall be deemed references to
Sections of, and Exhibits and Schedules to, this Credit Agreement, the following
terms shall have the meanings indicated, all accounting terms not otherwise
defined herein shall have the respective meanings accorded to them under GAAP
and all terms defined in the UCC and not otherwise defined herein shall have the
respective meanings accorded to them therein. Whenever the context may require,
any pronoun shall include the masculine, feminine and neuter forms. Unless the
context otherwise requires, any of the following terms may be used in the
singular or the plural, depending on the reference:
"A-Advanced Guaranty" shall mean the guaranty made as of the
Effective Date by the Borrower in favor of Wachovia of the Indebtedness of
A-Advanced Mini Storage LLC.
"Account" shall mean any right to payment for goods sold or
leased or for services rendered, whether or not earned by performance.
"Account Debtor" shall mean, with respect to any Account, the
obligor with respect to such Account.
"Account Control Agreement" shall mean an account control
agreement substantially in the form of Exhibit H hereto, as such agreement may
be amended, amended and restated, supplemented or otherwise modified, renewed or
replaced from time to time.
"Adjusted Eligible Finished Goods" shall mean, on any date,
Eligible Finished Goods minus Inventory Reserves.
"Adjusted Eligible Raw Materials" shall mean, on any date,
Eligible Raw Materials minus Inventory Reserves.
"Adjusted Eligible Work-in-Process" shall mean, on any date,
Eligible Work-in-Process minus Inventory Reserves.
"Adjusted LIBO Rate" shall mean with respect to any Eurodollar
Loan for any Interest Period, the rate per annum equal to the quotient (rounded
upwards, if necessary, to the next 1/100 of 1%) of (i) the LIBO Rate for such
Eurodollar Loan for such Interest Period divided by (ii) one minus the
applicable statutory reserve requirements of the Administrative Agent, expressed
as a decimal (including without duplication or limitation, basic, supplemental,
marginal and emergency reserves), from time to time in effect under Regulation D
or similar regulations of the Board. It is agreed that for purposes of this
definition, Eurodollar Loans made hereunder shall be deemed to constitute
Eurocurrency Liabilities as defined in Regulation D and to be subject to the
reserve requirements of Regulation D (for so long as such requirements are in
effect).
2
"Administrative Agent" shall mean Wachovia, in its capacity as
administrative agent for the Lenders hereunder or such successor Administrative
Agent as may be appointed pursuant to Section 12.12 hereof.
"Affiliate" shall mean with respect to any Person (including a
Credit Party), any other Person which, directly or indirectly, is in control of,
is controlled by, or is under common control with, such Person. For purposes of
this definition, a Person shall be deemed to be "controlled by" another Person
if such latter Person possesses, directly or indirectly, power either to (i)
vote fifteen percent (15%) or more of the securities or other ownership
interests having ordinary voting power for the election of directors (or the
equivalent) of such controlled Person or (ii) direct or cause the direction of
the management and policies of such controlled Person whether by contract or
otherwise.
"Affiliated Group" shall mean a group of Persons, each of which
is an Affiliate of some other Person in the group.
"Agents" shall mean, collectively, the Administrative Agent and
the Collateral Agent.
"Applicable Interest Margin" shall mean a percentage determined
pursuant to the following grid:
Consolidated Net
Indebtedness Eurodollar Loan Applicable
to Consolidated Base Rate Loan Interest
EBITDA Ratio Applicable Interest Margin Margin
------------ -------------------------- ------
Greater than 3.5:1 2.50% 3.75%
Greater than 3.0:1, but 2.25% 3.50%
Less than or equal to 3.5:1
Greater than 2.5:1, but 2.00% 3.25%
Less than or equal to 3.0:1
Greater than 2.0:1, but 1.75% 3.00%
Less than or equal to 2.5:1
Less than or equal to 2.0:1 1.50% 2.75%
"Applicable Law" shall mean all applicable provisions of
statutes, rules, regulations and orders of the United States, any state thereof
or municipality therein or of any foreign governmental body or of any regulatory
agency applicable to the Person in question, and all orders and decrees of all
courts and arbitrators in proceedings or actions in which the Person in question
is a party.
3
"Assignment and Acceptance" shall mean an agreement substantially
in the form of Exhibit A hereto, executed by the assignor, the assignee and the
other parties as contemplated hereby or thereby.
"Altamira Trust" shall mean the trust created on the Effective
Date and governed by the Altamira Trust Agreement.
"Altamira Trust Agreement" shall mean the Agreement and
Declaration of Trust dated as of October 1, 2002 by and between the Borrower and
Wilmington Trust Company, as trustee.
"Altamira Trust Assets" shall mean the assets of the Borrower and
certain Subsidiaries transferred to the Altamira Trust pursuant to the Altamira
Trust Agreement.
"Authorized Officer" shall mean, with respect to the Borrower or
any other Credit Party, the president, vice president, chief financial officer,
chief accounting officer, secretary, treasurer or the general partner or
managing member of such entity (or of the general partner or managing member of
such entity, if not a natural person), as the case may be.
"Bankruptcy Code" shall mean the Bankruptcy Reform Act of 1978,
as heretofore and hereafter amended, as codified at 11 U.S.C. ss. 101 et seq.
"Bankruptcy Court" shall mean the United States Bankruptcy Court
for the Southern District of New York.
"Base Rate" shall mean, for any day, a rate per annum equal to
the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Rate in effect for such day plus one half of one percent (0.50%). For
purposes hereof, "Prime Rate" shall mean the rate of interest per annum
established from time to time by the Administrative Agent as its prime rate,
which rate may not be the lowest rate of interest charged by the Administrative
Agent to its customers. "Federal Funds Rate" shall mean, for any day, the rate
per annum (rounded upwards, if necessary, to the next 1/100th of 1%) equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, on such
day, as published on the next succeeding Business Day by the Federal Reserve
Bank of New York; provided, that (i) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day
and (ii) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate quoted to the
Administrative Agent on such day on such transactions as determined by the
Administrative Agent. If the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable to
ascertain the Federal Funds Rate for any reason, including (without limitation)
the inability or failure of the Administrative Agent to obtain quotations in
accordance with the terms hereof, the Base Rate shall be determined without
regard to clause (b) of the first sentence of this definition until the
circumstances giving rise to such inability no longer exist. Any change in the
Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be
effective on the effective date of such change in the Prime Rate or the Federal
Funds Rate, respectively.
4
"Base Rate Loan" shall mean a Loan based on the Base Rate in
accordance with the provisions of Article 2 hereof.
"Board" shall mean the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrower" shall have the meaning given to such term in the
initial paragraph of this Credit Agreement.
"Borrowing" shall mean a Loan or group of Loans of the same
Interest Rate Type, made, converted or continued on the same date and, in the
case of Eurodollar Loans, as to which a single Interest Period is in effect.
"Borrowing Base" shall mean:
(i) on any date prior to the receipt of the Hillco Appraisal in
form and substance satisfactory to the Administrative Agent in its sole
discretion, the amount (calculated based on the most recent Borrowing Base
Certificate delivered pursuant to this Agreement) that is equal to 80% of the
net of Eligible Accounts Receivable less the Credit Memo Lag Reserve, plus
$5,000,000;
(ii) on any date after the receipt of the Hillco Appraisal in
form and substance satisfactory to the Administrative Agent in its sole
discretion, the amount (calculated based on the most recent Borrowing Base
Certificate delivered pursuant to this Agreement) that is equal to (a) 80% of
the net of Eligible Accounts Receivable less the Credit Memo Lag Reserve; plus
(b) 30% of Adjusted Eligible Raw Materials of Guilford Automotive and Guilford
Technical Textile and 40% of Adjusted Eligible Raw Materials of Guilford Fibers;
plus (c) 25% of Adjusted Eligible Work-in-Process of Guilford Automotive and
Guilford Technical Textile; plus (d) 50% of Adjusted Eligible Finished Goods of
Guilford Automotive, 30% of Adjusted Eligible Finished Goods of Guilford Fibers
and 40% of Adjusted Eligible Finished Goods of Guilford Technical Textile.
Borrowing Base eligibility standards may be fixed and revised from time to time
by the Administrative Agent in its sole discretion, exercised reasonably. The
Borrowing Base shall be subject to reserves from time to time established by the
Administrative Agent with any changes in such standards and reserves to be
effective five (5) days after delivery of notice thereof to the Borrower. The
Borrowing Base shall not include any Accounts or Inventory of discontinued
operations or operations that are to be discontinued.
"Borrowing Base Certificate" shall mean a certificate,
substantially in the form of Exhibit B-2 hereto, appropriately completed by an
Authorized Officer of the Borrower with respect to the Borrowing Base.
5
"Borrowing Certificate" shall mean a borrowing certificate,
substantially in the form of Exhibit B-1 hereto, to be delivered by the Borrower
to the Administrative Agent in connection with each Borrowing.
"Business Day" shall mean any day other than a Saturday, Sunday
or other day on which banks are required or permitted to close in the States of
New York or North Carolina; provided, however, that when used in connection with
a Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in Dollar deposits on the London Interbank
Market.
"Capital Expenditures" shall mean, with respect to any Person for
any period, the aggregate of all expenditures (whether paid in cash or accrued
as a liability) by such Person during that period which, in accordance with
GAAP, are or should be included in "additions to property, plant or equipment"
or similar items reflected in the statement of cash flows of such Person.
"Capital Lease", as applied to any Person, shall mean any lease
of any property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is or should be accounted for as a capital lease
on the balance sheet of that Person.
"Capital Stock" shall mean (i) with respect to corporate stock,
any and all shares, interests, rights to purchase, warrants, options,
participations or other equivalents of or interests in (however designated)
corporate stock, including without limitation, any Preferred Stock or (ii) with
respect to any other evidence of beneficial ownership of any entity which is not
a corporation, any and all partnership interests or any other equity interests
or evidences of beneficial ownership, rights to purchase, warrants, options,
participations or other equivalents of or interests in (however designated) a
partnership interest or other equity interest or evidence of beneficial
ownership.
"Cases" shall mean, collectively, those cases initiated on March
13, 2002 under which each of the Credit Parties is a debtor and
debtor-in-possession under Chapter 11 of the Bankruptcy Code.
"Cash Collateral Account" shall have the meaning given to such
term in Section 11.1 hereof.
"Cash Equivalents" shall mean any of the following: (i) full
faith and credit obligations of the United States of America, or fully
guaranteed as to interest and principal by the full faith and credit of the
United States of America, maturing in not more than one year from the date such
investment is made; (ii) time deposits and certificates of deposit having a
final maturity of not more than one year after the date of issuance thereof of
any commercial bank incorporated under the laws of the United States of America
or any state thereof or the District of Columbia, which bank is a member of the
Federal Reserve System and has a combined capital and surplus of not less than
$1,000,000,000.00 and with a senior unsecured debt credit rating of at least "A"
by ▇▇▇▇▇'▇ or "A" by S&P; (iii) commercial paper of companies, banks, trust
companies or national banking associations incorporated or doing business under
6
the laws of the United States of America or one of the States thereof, in each
case having a remaining term until maturity of not more than one hundred eighty
(180) days from the date such investment is made and rated at least P-1 by
▇▇▇▇▇'▇ or at least A-1 by S&P; (iv) repurchase agreements with any financial
institution having combined capital and surplus of not less than
$1,000,000,000.00 with a term of not more than seven (7) days for underlying
securities of the type referred to in clause (i) above; and (v) money market
funds which invest primarily in the Cash Equivalents set forth in the preceding
clauses (i) - (iv).
"Change in Control" shall mean (i) any Person, Affiliated Group
or group (such term being used as defined in the Securities Exchange Act of
1934, as amended), other than a Person who is a Lender or an Affiliated Group or
group of which any Person is a Lender, acquiring ownership or control after the
date hereof in excess of 40% of equity securities having voting power to vote in
the election of the Board of Directors of the Borrower either on a fully diluted
basis or based solely on the voting stock then outstanding, (ii) if at any time,
individuals who at the date hereof constituted the Board of Directors of the
Borrower (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the Borrower,
as the case may be, was approved by a vote of the majority of the directors then
still in office who were either directors at the date hereof or whose election
or nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of the Borrower then in office,
(iii) the direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets of the
Borrower to any Person or (iv) the adoption of a plan relating to the
liquidation or dissolution of the Borrower.
"Closing Date" shall mean the date on which the conditions
precedent set forth in Section 4.1 hereof have been satisfied or waived.
"Code" shall mean the Internal Revenue Code of 1986, as
heretofore and hereafter amended, as codified at 26 ▇.▇.▇.▇▇. 1 et seq., and the
applicable regulations promulgated thereunder, or any successor provision
thereto.
"Collateral" shall mean with respect to each Credit Party, all of
such Credit Party's right, title and interest in and to (i) all personal
property, tangible and intangible, wherever located or situated and whether now
owned, presently existing or hereafter acquired or created, including but not
limited to, all goods, accounts, accounts receivable (other than accounts
receivable actually sold in a factoring transaction permitted pursuant to
Section 6.7 hereof), instruments, intercompany obligations, contract rights,
partnership and joint venture interests, interests in limited liability
companies, interests in trusts (including, without limitation, the Altamira
Trust and the Altamira Trust Agreement) documents, chattel paper, electronic
chattel paper, general intangibles, goodwill, equipment, machinery, inventory,
investment property, copyrights, trademarks, trade names, patents, insurance
proceeds, cash, deposit accounts, letter of credit rights, supporting
obligations, fixtures and the Pledged Securities, and any proceeds or products
of, income from, any of the foregoing, in any form, including, without
limitation, any claims against third parties for loss or damage to or
destruction of any or all of the foregoing; (ii) all books, records, ledger
7
cards, computer tapes and diskettes wherever located, related to the Collateral
described in clause (i) or (iii) of this definition or any of the Real Property
Assets; and (iii) the Pledged Collateral.
"Collateral Agent" shall mean Wachovia Bank, National Association
in its capacity as collateral agent for the Lenders hereunder or such successor
Collateral Agent as may be appointed pursuant to Section 12.12 hereof.
"Commitment" shall mean the commitment of each Lender to make
Loans to the Borrower and to participate in Letters of Credit from the Initial
Date applicable to such Lender through the Commitment Termination Date up to an
aggregate principal amount, at any one time, not in excess of the amount set
forth (i) under such Lender's name opposite the column entitled "Commitment" on
the signature pages hereto or (ii) in any applicable Assignment and
Acceptance(s) to which it may be a party, as the case may be, as such amount may
be reduced from time to time in accordance with the terms of this Credit
Agreement.
"Commitment Fee" shall have the meaning given to such term in
Section 2.6 hereof.
"Commitment Termination Date" shall mean the earlier of (i) the
Loan Maturity Date, (ii) the date on which the Total Commitment shall terminate
in accordance with Section 2.7 or Article 7 hereof and (iii) any anniversary of
the Closing Date on or with respect to which the Borrower has not paid the
Renewal Fee.
"Concentration Accounts" shall mean the concentration accounts
established by the Credit Parties for deposit of all collections on Accounts as
set forth on Schedule 8.3(b) hereto.
"Consolidated EBITDA" shall mean, for any period, all as
determined in accordance with GAAP, the consolidated net income (or net loss) of
the Borrower and its Consolidated Subsidiaries for such period, plus (a) the sum
of (i) depreciation expense, (ii) amortization expense, (iii) other non-cash
expenses, (iv) consolidated federal, state and local income tax expense, (v)
Consolidated Interest Expense, (vi) extraordinary losses, (vii) any
non-recurring charge or restructuring charge which in accordance with GAAP has
been deducted in the calculation of operating income and (viii) the cumulative
effect of any change in accounting principles as shown on the Borrower's
consolidated statement of income for such period less (b) extraordinary gains
plus or minus (c) the amount of cash received or expended in such period in
respect of any amount which, under clause (vii) above, was taken into account in
determining Consolidated EBITDA for such or any prior period.
"Consolidated Fixed Charge Coverage Ratio" shall mean, at any
date for which such ratio is to be determined, the ratio of Consolidated EBITDA
for the Rolling Four Quarter period ended on such date to the sum of the
following for such period: (x) Consolidated Interest Expense plus (y) Capital
Expenditures plus (z) scheduled principal payments on all Indebtedness of the
Borrower and its Consolidated Subsidiaries, including, without limitation, any
Indebtedness under any Loans and the Notes; provided that (i) with respect to
8
the first quarter of Borrower's fiscal year 2003, in calculating such ratio,
each of Consolidated EBITDA, Consolidated Interest Expense, Capital Expenditures
and scheduled principal payments will be determined for such quarter on an
annualized basis, (ii) with respect to the second quarter of Borrower's fiscal
year 2003, in calculating such ratio, each of Consolidated EBITDA, Consolidated
Interest Expense, Capital Expenditures and scheduled principal payments will be
determined for the first two quarters of such fiscal year on an annualized basis
and (iii) with respect to the third quarter of Borrower's fiscal year 2003, in
calculating such ratio, each of Consolidated EBITDA, Consolidated Interest
Expense, Capital Expenditures and scheduled principal payments will be
determined for the first three quarters of such fiscal year on an annualized
basis.
"Consolidated Interest Expense" shall mean, for any period, the
gross interest expense, whether paid or accrued (including the interest
component of Capital Lease obligations) of the Borrower and its Consolidated
Subsidiaries on a consolidated basis for such period, including, without
limitation or duplication, (i) interest expense in respect of the Loans and all
other outstanding Indebtedness, (ii) amortization of the discount or issuance
cost of any Indebtedness (including, without limitation, any original issue
discount attributable to any issuance of debt securities), (iii) commissions,
discounts and other fees and charges payable in connection with letters of
credit, (iv) net payments payable in connection with all Interest Rate
Protection Agreements (including amortization of any discount) and (v) any
interest which is capitalized, all as determined in conformity with GAAP.
"Consolidated Net Income" shall mean, for any period for which
such amount is being determined, the net income or loss of the Borrower and its
Consolidated Subsidiaries during such period determined on a consolidated basis
for such period taken as a single accounting period in accordance with GAAP;
provided, that (i) there shall be excluded (x) the income (or loss) of any
Person (other than a Consolidated Subsidiary) in which the Borrower or any of
its Consolidated Subsidiaries has an equity investment or comparable interest,
except to the extent of the amount of dividends or other distributions actually
paid to the Borrower or any of its Consolidated Subsidiaries by such Person
during such period and (y) the income of any Consolidated Subsidiary to the
extent that the declaration or payment of dividends or similar distributions by
that Consolidated Subsidiary of its income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Consolidated Subsidiary; and (ii) there shall be included or excluded (as
applicable) on a Pro Forma Basis the income (or loss) of any Person which
becomes a Consolidated Subsidiary of the Borrower, is merged into or
consolidated with the Borrower or any of its Consolidated Subsidiaries or assets
are acquired or sold or otherwise disposed of by the Borrower or any of its
Consolidated Subsidiaries during such period.
"Consolidated Net Indebtedness" shall mean Total Funded Debt
minus any cash or Cash Equivalents reflected on the balance sheets of the
Borrower and its Consolidated Subsidiaries in excess of $5,000,000.
9
"Consolidated Subsidiaries" shall mean all Subsidiaries of a
Person which are required or permitted to be consolidated with such Person for
financial reporting purposes in accordance with GAAP (other than any Subsidiary
which is an asset of the Altamira Trust).
"Consolidated Tangible Net Worth" shall mean at any date of
determination, the sum of the capital stock and additional paid-in capital plus
retained earnings (or minus accumulated deficit) of the Borrower and its
Consolidated Subsidiaries on a consolidated after-tax basis determined in
accordance with GAAP, minus the sum of the value, as set forth or reflected on
the most recent consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries, prepared in accordance with GAAP, of:
(a) All assets which would be treated as intangible assets
for balance sheet presentation purposes under GAAP, including without
limitation goodwill (whether representing the excess of cost over
book value of assets acquired, or otherwise), trademarks, tradenames,
copyrights, patents and technologies, and unamortized debt discount
and expense;
(b) To the extent not included in clause (a) of this
definition, any amount at which shares of the capital stock of the
Borrower and its Consolidated Subsidiaries appear as an asset on the
balance sheet of the Borrower and its Consolidated Subsidiaries;
(c) Loans or advances to stockholders, directors, officers
or employees; and
(d) To the extent not included in clause (a) of this
definition, deferred expenses.
"Contribution Agreement" shall mean a contribution agreement
among the Credit Parties, substantially in the form of Exhibit H hereto, as such
agreement may be amended, amended and restated, supplemented or otherwise
modified, renewed or replaced from time to time.
"Credit Agreement" shall have the meaning given to such term in
the initial paragraph of this agreement.
"Credit and Collection Policy" shall mean those credit and
collection policies and practices of the Borrower and each other Credit Party
relating to Accounts in existence on the date hereof and as modified in
compliance with Section 6.20.
"Credit Exposure" shall mean, with respect to any Lender, an
amount equal to (i) the aggregate principal amount of outstanding Loans owed to
such Lender hereunder, plus (ii) such Lender's pro rata share of any L/C
Exposure (if applicable), plus (iii) the unused amount of the Commitment of such
Lender then in effect.
"Credit Memo Account" shall mean an Account with respect to which
the Account Debtor has provided notification to a Credit Party with respect to
an asserted non-cash reduction relating to such account as a result of, among
other things, a billing error, ▇▇▇▇-down allowance or returned product, to the
extent of the amount of such asserted non-cash reduction.
10
"Credit Memo Lag Reserve" shall mean, on any date, an amount
equal to (i) the aggregate balance of all Credit Memo Accounts for the twelve
month period ending on such date, divided by 360; multiplied by (ii) 49 (which
number is intended to represent an approximate average of the number of days in
excess of 30 days that elapse from the creation of a Credit Memo Account until
the issuance of a credit memo by a Credit Party, and which number shall be
subject to review and modification by the Administrative Agent from time to time
as set forth in Section 5.1m).
"Credit Party" shall mean the Borrower and each of the
Guarantors.
"Debtor Relief Laws" shall mean the Bankruptcy Code and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief laws of the United States of America or other
applicable jurisdictions from time to time in effect affecting the rights of
creditors generally.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean, at any time, any Lender which
shall not have theretofore made available to the Administrative Agent or the
Issuing Bank, as applicable, any amounts required to be made available by such
Lender hereunder or otherwise failed to pay any obligation owing by such Lender
pursuant to this Credit Agreement.
"Dilution Percentage" shall mean, on any date, expressed as a
percentage, the total of all non-cash credits or reductions of the Credit
Party's accounts receivable for the last twelve months (calculated on a rolling
basis monthly) divided by gross sales for the same period.
"Dilution Reserve" shall mean, on any date, (a) the Dilution
Percentage minus 5%, multiplied by (b) gross sales for any period of measurement
(to the extent non-negative).
"DIP Facility" shall mean: the Revolving Credit and Guaranty
Agreement, dated as of March 13, 2002, among ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc., debtor and
debtor-in-possession, as borrower, the subsidiaries of the borrower named
therein, each a debtor and debtor-in-possession, as guarantors, the lenders
named therein and Wachovia Bank, National Association (formerly known as First
Union National Bank) as Administrative Agent, Documentation Agent, Collateral
Agent, Book Manager and Lead Manager, as amended by (i) that certain First
Amendment to Revolving Credit and Guaranty Agreement dated as of ▇▇▇▇▇ ▇, ▇▇▇▇,
(▇▇) that certain Second Amendment to Revolving Credit and Guaranty Agreement
dated as of ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇▇) that certain Third Amendment to Revolving
Credit and Guaranty Agreement dated as of April 23, 2002, (iv) that certain
Fourth Amendment to Revolving Credit and Guaranty Agreement dated as of April
29, 2002 and (v) that certain Fifth Amendment to Revolving Credit and Guaranty
Agreement dated as of May 8, 2002.
"Discontinued Operations Trust" shall mean the trust
created on the Effective Date and governed by the Discontinued Operations Trust
Agreement.
11
"Discontinued Operations Trust Agreement" shall mean the
Agreement and Declaration of Trust dated as of October 1, 2002 by and between
the Borrower and Wilmington Trust Company, as trustee.
"Discontinued Operations Trust Assets" shall mean the assets of
the Borrower and certain of its Subsidiaries transferred to the Discontinued
Operations Trust pursuant to the Discontinued Operations Trust Agreement.
"Dollars" and "$" shall mean lawful money of the United States of
America.
"Effective Date" shall mean the "Effective Date" under and as
defined in the Plan of Reorganization.
"Eligible Accounts Receivable" shall mean, at the time of any
determination, the gross outstanding balance at such time, determined in
accordance with GAAP and stated on a basis consistent with the historical
practices of the applicable Credit Party as of the date hereof, of Accounts of
the applicable Credit Party less, as applicable and without duplication, the
aggregate amount of (i) all accrued rebates, (ii) all trade discounts, (iii) all
finance charges, late fees and other fees that are unearned, (iv) all reserves
for service fees and such other fees or commissions or similar amounts that the
applicable Credit Party has agreed to pay, (v) all cash received in respect of
Accounts but not yet applied by the applicable Credit Party to reduce the amount
of the Accounts and (vi) any Account deemed ineligible for inclusion in the
calculation of the Borrowing Base pursuant to any of clauses (a) through (t)
below or otherwise deemed by the Administrative Agent in its reasonable
discretion to be ineligible for inclusion in the calculation of the Borrowing
Base. Without limiting the foregoing, to qualify as an Eligible Account
Receivable, an Account shall indicate as sole payee and as sole remittance party
a Credit Party. Standards of eligibility may be fixed from time to time solely
by the Administrative Agent in the exercise of its reasonable discretion, with
any changes in such standards to be effective five (5) days after delivery of
notice thereof to the Borrower. Unless otherwise approved from time to time in
writing by the Administrative Agent, the following shall not be included in
Eligible Accounts Receivable:
(a) any Account for which a Credit Party does not have sole
lawful and absolute title;
(b) any Account that arises out of a sale made by a Credit Party
to an employee, officer, agent, director, stockholder, or affiliate of such
Credit Party;
(c) any Account for which the Account Debtor (i) is a creditor of
the applicable Credit Party, (ii) has or has asserted a right of set-off against
the applicable Credit Party (unless such Account Debtor has entered into a
written agreement reasonably acceptable to the Agent to waive such set-off
rights) or (iii) has disputed its liability (whether by chargeback or otherwise)
or made any asserted or unasserted claim (of which a Credit Party has actual or
constructive notice) with respect to the Account or any other Account of the
applicable Credit Party which has not been resolved, in each case, without
12
duplication, to the extent of the amount owed by such applicable Credit Party to
the Account Debtor, the amount of such actual or asserted right of set-off, or
the amount of such dispute or claim, as the case may be (without duplication for
non-cash credits taken into consideration in calculating Dilution Percentage);
(d) any Account for which the Account Debtor is insolvent or the
subject of any bankruptcy case or insolvency proceeding of any kind (other than
postpetition accounts payable of an Account Debtor that is a
debtor-in-possession under the Bankruptcy Code and acceptable to the
Administrative Agent);
(e) any Account that is not payable in Dollars or with respect to
which the Account Debtor is either not incorporated or organized under the laws
of the United States of America, any state thereof or the District of Columbia
or is located, domiciled or has its principal place of business or substantially
all of its assets outside the United States, with the exception of Canada
(except to the extent such Account is supported by an irrevocable letter of
credit or credit insurance issued by an institution acceptable to the
Administrative Agent in its reasonable discretion, which credit insurance names
the Administrative Agent as a loss payee);
(f) any Account with respect to which the sale to the Account
Debtor is on a delayed shipment (or ▇▇▇▇ and hold) basis (provided that
following shipment, the related Account shall not be excluded from Eligible
Accounts Receivable solely as a result of this clause), guaranteed sale,
sale-and-return, ship-and-return, sale on approval, extended terms or
consignment or other similar basis or made pursuant to any other agreement
providing for repurchase or return of any merchandise which has been claimed to
be defective or otherwise unsatisfactory;
(g) any Account with respect to which the goods giving rise to
such Account have not been shipped and title has not been transferred to the
Account Debtor, or the Account represents a progress-billing or otherwise does
not represent a completed sale; for purposes hereof, "progress-billing" means
any invoice for goods sold or leased or services rendered under a contract or
agreement pursuant to which the Account Debtor's obligation to pay such invoice
is conditioned upon the applicable Credit Party's completion of any further
performance under the contract or agreement;
(h) any Account that does not comply in all material respects
with the requirements of all applicable laws and regulations, whether Federal,
state or local, including without limitation the Federal Consumer Credit
Protection Act, the Federal Truth in Lending Act and Regulation Z of the Board;
(i) any Account that is subject to any adverse security deposit,
retainage or other similar advance made by or for the benefit of the Account
Debtor, in each case to the extent thereof;
13
(j) any Account that is unpaid more than 60 days from the
original due date;
(k) any Account that was not paid in full, and with respect to
which the applicable Credit Party created a new receivable for the unpaid
portion of the Account, without the agreement of the customer, including without
limitation chargebacks, debit memos and other adjustments for unauthorized
deductions;
(l) all Accounts of an Account Debtor where more than 50% of all
Accounts of such Account Debtor are unpaid more than 60 days from the original
due date;
(m) any Account that has a payment term that is greater than 90
days;
(n) any Account that (i) is not subject to a valid and perfected
first priority Lien in favor of the Collateral Agent for the benefit of the
Lenders, (ii) is subject to a Lien other than the Liens (if any) permitted by
the Loan Documents, or (iii) does not otherwise conform in all material respects
to the representations and warranties contained in the Loan Documents relating
to Accounts;
(o) any Account that is a factored receivable or is otherwise
subject to a lien in favor of a factor pursuant to a factoring agreement;
(p) any Account with respect to which a check, promissory note,
draft, trade acceptance or other instrument for the payment of money has been
received, presented for payment and returned uncollected for any reason for all
or any part of such Account;
(q) any Account that has been written off the books of the
applicable Credit Party or has been otherwise designated as uncollectible;
(r) any Account whose inclusion as an Eligible Account Receivable
would cause the aggregate amount of the Eligible Accounts Receivable of a
particular Account Debtor to exceed 15% of the total Eligible Accounts
Receivable;
(s) any Account that is a non-trade Account, or relates to
payments for interest; or
(t) any amounts represented by the negative balances included in
any Account described in clause (j) above.
"Eligible Assignee" shall mean (i) any Lender, any Affiliate of
any Lender (which, for purposes of this definition, shall include any investment
or similar fund that is owned, managed or controlled by such Lender) or (ii) any
commercial bank, insurance company, investment or mutual fund or other entity
14
that is an "accredited investor" (as defined in Regulation D under the
Securities Act) and which extends credit, buys loans and is in the business of
lending as one of its businesses; provided, that no Affiliate of the Borrower
shall be an Eligible Assignee (other than an Affiliate of the Borrower who is
also a Lender as of the date hereof).
"Eligible Finished Goods" shall mean, on any date, Eligible
Inventory defined as Finished Goods by the applicable Credit Party on such date
as shown on the applicable Credit Party's perpetual inventory records in
accordance with its current and historical accounting practices.
"Eligible Inventory" shall mean, at the time of any determination
thereof, without duplication, the Inventory Value of the Credit Parties at the
time of such determination that is not ineligible for inclusion in the
calculation of the Borrowing Base pursuant to any of clauses (a) through (l)
below, minus any Inventory otherwise deemed by the Agent in its reasonable
discretion to be ineligible for inclusion in the calculation of the Borrowing
Base. Without limiting the foregoing, to qualify as "Eligible Inventory" no
person other than a Credit Party shall have any direct or indirect ownership,
interest or title to such Inventory and no person other than a Credit Party
shall be indicated on any purchase order or invoice with respect to such
Inventory as having or purporting to have an interest therein. Standards of
eligibility may be altered from time to time solely by the Administrative Agent
in the exercise of its reasonable judgment, with any changes in such standards
to be effective 5 days after delivery of notice thereof to the Borrower. Unless
otherwise from time to time approved in writing by the Administrative Agent, no
Inventory shall be deemed Eligible Inventory if, without duplication:
(a) a Credit Party does not have sole and good, valid and
unencumbered title thereto (except for permitted liens);
(b) it is not located in the United States;
(c) it is not located on property owned or leased by a Credit
Party or, if located in a third party warehouse, a valid landlord waiver
satisfactory in form and substance to the Administrative Agent is not in full
force or effect;
(d) it is supplies, packing or shipping materials, cartons,
repair parts, labels or miscellaneous spare parts, dyes or chemicals;
(e) it is not subject to a valid and perfected first priority
lien in favor of the Collateral Agent for the benefit of the Lenders;
(f) it is Inventory that is deemed to be greater than one year
old;
(g) it is consigned or at a customer location but still accounted
for in applicable Credit Party's perpetual inventory balance;
15
(h) it is Inventory which is being processed offsite at a third
party location or an outside processor in which a valid waiver with each
processor satisfactory in form and substance to the Administrative Agent is not
in full force or effect, or is in transit to or from the said third party
location or outside processor;
(i) it is identified as overstock by the applicable Credit Party;
(j) it is in-transit to or from a foreign location, or is part of
a ▇▇▇▇ and hold arrangement from a vendor, which has not yet been received into
a facility owned or operated by a Credit Party;
(k) it is Inventory used as a sample or prototype; or
(l) it is Inventory which is recognized as damaged, off quality,
or not to customer specifications by the applicable Credit Party or in any way
not first-quality inventory.
"Eligible Raw Materials" shall mean, on any date, Eligible
Inventory defined as Raw Materials of a Credit Party on such date as shown on
the applicable Credit Party's perpetual inventory records in accordance with its
current and historical accounting practices.
"Eligible Work-in-Process" shall mean, on any date, Eligible
Inventory defined as Work-in-Process of a Credit Party on such date as shown on
the applicable Credit Party's perpetual inventory records in accordance with its
current and historical accounting practices.
"Environment" shall mean any surface or subsurface water,
groundwater, water vapor, surface or subsurface land, air and all other natural
resources.
"Environmental Claim" shall mean any and all administrative or
judicial actions, suits, orders, claims, liens, notices, notices of violations,
investigations, complaints, requests for information, proceedings, or other
written communication, whether criminal or civil, pursuant to or relating to any
applicable Environmental Law by any Person (including, but not limited to, any
Governmental Authority, private person and citizens' group) based upon,
alleging, asserting, or claiming any actual or potential (i) violation of or
liability under any Environmental Law, (ii) violation of any Environmental
Permit, or (iii) liability for investigatory costs, cleanup costs, removal
costs, remedial costs, response costs, natural resource damages, damage,
property damage, personal injury, fines, or penalties arising out of, based on,
resulting from, or related to the presence, Release or threatened Release into
the Environment of any Hazardous Materials at any location, including, but not
limited to, any Premises or any location other than any Premises to which
Hazardous Materials or materials containing Hazardous Materials were sent for
handling, storage, treatment, or disposal.
16
"Environmental Clean-up Site" shall mean any location which is
listed or formally proposed for listing on the National Priorities List, the
Comprehensive Environmental Response, Compensation and Liability Information
System, or on any similar state list of sites requiring investigation or
cleanup.
"Environmental Laws" shall mean any and all applicable federal,
state, local or municipal or foreign laws, rules, orders, regulations, statutes,
ordinances, codes, common law doctrines, decrees, binding agreements or consent
decrees entered into or issued by a Governmental Authority or requirements of
any Governmental Authority regulating, relating to, or imposing liability or
standards of conduct concerning, any Hazardous Material or environmental
protection or worker health and safety, as now or at any time hereafter in
effect, including without limitation, any applicable provisions of the Clean
Water Act also known as the Federal Water Pollution Control Act ("FWPCA"), 33
U.S.C.ss.1251 et seq., the Clean Air Act ("CAA"), 42 U.S.C.ss.ss.7401 et seq.,
the Federal Insecticide, Fungicide and Rodenticide Act ("FIFRA"), 7 ▇.▇.▇.▇▇.▇▇.
136 et seq., the Surface Mining Control and Reclamation Act ("SMCRA"), 30
U.S.C.ss.ss.1201 et seq., the Comprehensive Environmental Response, Compensation
and Liability Act ("CERCLA"), 42 U.S.C.ss.9601 et seq., the Superfund Amendment
and Reauthorization Act of 1986 ("▇▇▇▇"), Public Law 99-499, 100 Stat. 1613, the
Emergency Planning and Community Right to Know Act ("ECPCRKA"), 42
U.S.C.ss.11001 et seq., the Resource Conservation and Recovery Act ("RCRA"), 42
U.S.C.ss.6901 et seq., the Occupational Safety and Health Act as amended
("OSHA"), 29 U.S.C.ss.651 et seq., together, in each case, with any amendment
thereto, and the regulations adopted thereunder.
"Environmental Permit" shall mean any federal, state, local,
provincial, or foreign permits, licenses, approvals, consents or authorizations
required for the ownership or operations of the Borrower by any Governmental
Authority under or in connection with any Environmental Law and includes any and
all orders, consent orders or binding agreements issued or entered into by a
Governmental Authority under any applicable Environmental Law.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as heretofore and hereafter amended, as codified at 29 U.S.C. ss. 1001 et
seq., and applicable regulations promulgated thereunder, or any successor
provision thereto.
"ERISA Affiliate" shall mean each Person (as defined in Section
3(9) of ERISA) which is treated as a single employer with any Credit Party under
Section 414(b), (c), (m) or (o) of the Code.
"Eurodollar Loan" shall mean a Loan based on the LIBO Rate in
accordance with the provisions of Article 2 hereof.
"Event of Default" shall have the meaning given to such term in
Article 7 hereof.
"Excess" shall have the meaning given to such term in Section
2.9(a) hereof.
"Facility Termination Date" shall mean the date on which all of
the Obligations have been indefeasibly paid in full in cash, the Commitment
Termination Date has occurred and all Letters of Credit shall have expired or
been terminated, canceled or cash collateralized in an amount equal to 105% of
the then current L/C Exposure.
17
"Federal Funds Rate" shall have the meaning given to such term in
the definition of "Base Rate" set forth in this Article 1.
"Fee Letter" shall mean that certain letter agreement, dated as
of September 23, 2002, between the Borrower and the Administrative Agent,
relating to the payment of certain fees, as such letter agreement may be
amended, modified or supplemented from time to time by a written instrument
executed by the parties thereto.
"Fees" shall mean all fees payable pursuant to the Fee Letters
and pursuant to the terms of this Credit Agreement.
"Final Order" shall mean an order of the Bankruptcy Court not
subject to a stay pending appeal.
"Finished Goods" shall mean completed goods which require no
additional processing, to be sold in the ordinary course of business.
"Fundamental Documents" shall mean this Credit Agreement, any
note issued to evidence any Loan hereunder, any Letter of Credit, any Mortgage,
the Contribution Agreement, the Patent Security Agreement, the Intercreditor
Agreement, UCC financing statements, the Fee Letters and any other documentation
which is required to be or is otherwise executed by any Credit Party and
delivered to the Administrative Agent, the Collateral Agent or the Lenders in
connection with this Credit Agreement or any of the documents listed above,
other than (i) the Note Agreement, (ii) the A-Advanced Guaranty and (iii) the
Subordinated Security Agreement.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time, consistently applied
(except for accounting changes in response to FASB releases, or other
authoritative pronouncements); provided, however, that for purposes of
determining compliance with any covenant set forth in Article 6 hereof, GAAP
shall mean generally accepted accounting principles in the United States of
America as in effect on the Closing Date, applied on a basis consistent with the
application used in the financial statements referred to in Section 3.6 hereof.
"Governmental Authority" shall mean any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, or any court, in each case whether of the United States or any
foreign jurisdiction.
"Guarantors" shall mean the guarantors signatory hereto as of the
date hereof and any other direct or indirect Subsidiary of a Credit Party
acquired or created after the date hereof, which Subsidiary becomes a signatory
to this Credit Agreement as a Guarantor as required by Section 5.12 hereof.
18
"Guaranty" shall mean, as to any Person, any direct or indirect
obligation of such Person guaranteeing or intending to guarantee, or otherwise
providing credit support, for any Indebtedness, Capital Lease, dividend or other
monetary obligation ("primary obligation") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, by contract, as a
general partner or otherwise, including, without limitation, any obligation of
such Person, whether or not contingent, (a) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(b) to advance or supply funds (i) for the purchase or payment of any such
primary obligation or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, or (c) to purchase property, securities or services from the
primary obligor or other Person, in each case, primarily for the purpose of
assuring the performance of the primary obligor of any such primary obligation
or assuring the owner of any such primary obligation of the repayment of such
primary obligation. The amount of any Guaranty shall be deemed to be an amount
equal to (x) the stated or determinable amount of the primary obligation in
respect of which such Guaranty is made (or, if the amount of such primary
obligation is not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder)) or (y) the stated maximum liability under such Guaranty, whichever
is less.
"Guilford Automotive" shall mean the automotive division of the
Borrower and the other Credit Parties.
"Guilford Fibers" shall mean the fibers division of the Borrower
and the other Credit Parties.
"Guilford Technical Textile" shall mean the technical textile
division of the Borrower and the other Credit Parties.
"Hazardous Materials" shall mean any chemicals, materials,
substances or wastes in any amount or concentration which are now or hereafter
become defined as or included in the definition of "hazardous substances,"
"hazardous materials," "hazardous wastes," "extremely hazardous wastes,"
"restricted hazardous wastes," "toxic substances," "toxic pollutants,"
"pollutants," "regulated substances," "insecticides," "fungicides",
"rodenticides", or "contaminants" or words of similar import, under any
Environmental Law, including petroleum, petroleum hydrocarbons or petroleum
products, petroleum by-products, radioactive materials, asbestos or
asbestos-containing materials, gasoline, diesel fuel, pesticides, radon, urea
formaldehyde, lead or lead-containing materials, polychlorinated biphenyls.
"Hillco Appraisal" shall mean the appraisal of the Inventory of
the Credit Parties to be completed by Hillco Appraisal Services, LLC on or after
the Closing Date.
"Indebtedness" shall mean (without double counting), at any time
and with respect to any Person, (i) indebtedness of such Person for borrowed
money (whether by loan or the issuance and sale of debt securities) or for the
deferred purchase price of property or services purchased (other than amounts
constituting trade payables arising in the ordinary course of business and
payable in accordance with customary trading terms not in excess of 90 days);
19
(ii) all indebtedness of such Person evidenced by a note, bond, debenture or
similar instrument (whether or not disbursed in full in the case of a
construction loan); (iii) indebtedness of others which such Person has directly
or indirectly assumed or guaranteed or otherwise provided credit support
therefor; (iv) indebtedness of others secured by a Lien on assets of such
Person, whether or not such Person shall have assumed such indebtedness
(provided, that if such Person has not assumed such indebtedness of another
Person then the amount of indebtedness of such Person pursuant to this clause
(iv) for purposes of this Credit Agreement shall be equal to the lesser of the
amount of the indebtedness of the other Person or the fair market value of the
assets of such Person which secures such other indebtedness); (v) obligations of
such Person in respect of letters of credit, acceptance facilities, or drafts or
similar instruments issued or accepted by banks and other financial institutions
for the account of such Person; (vi) any Guaranty by such Person; (vii)
obligations of such Person under Capital Leases; (viii) all obligations of such
Person under any Interest Rate Protection Agreement; (ix) deferred payment
obligations of such Person resulting from the adjudication or settlement of any
litigation and (x) all advances made to any Credit Party by a factor pursuant to
a factoring arrangement permitted under Section 6.1(g) (including, without
limitation, pursuant to any factoring arrangement pursuant to which any Accounts
are sold to a factor).
"Initial Date" shall mean (i) in the case of the Administrative
Agent, the Collateral Agent and the Issuing Bank, the Closing Date, (ii) in the
case of each Lender which is an original party to this Credit Agreement, the
Closing Date and (iii) in the case of any other Lender, the effective date of
the Assignment and Acceptance pursuant to which it became a Lender.
"Instrument of Assumption and Joinder" shall mean an Assumption
and Joinder Agreement substantially in the form of Exhibit C hereto.
"Intercreditor Agreement" shall mean the Intercreditor and
Collateral Agency Agreement executed by the Collateral Agent, the Administrative
Agent, the Noteholders and Wachovia (in its individual capacity, substantially
in the form of Exhibit G hereto.
"Interest Deficit" shall have the meaning given to such term in
Section 2.16 hereof.
"Interest Payment Date" shall mean (i) as to any Base Rate Loan,
the last Business Day of each March, June, September and December (commencing
the last Business Day of December 2002 and (ii) as to any Eurodollar Loan the
last day of the applicable Interest Period.
"Interest Period" shall mean as to any Eurodollar Loan, the
period commencing on the date such Loan is made, continued or converted or the
last day of the preceding Interest Period and ending on the numerically
corresponding day (or if there is no corresponding day, then the last day) in
the calendar month that is one or three months thereafter as the Borrower may
elect; provided, however, that (i) if any Interest Period would end on a day
which shall not be a Business Day, such Interest Period shall be extended to the
next succeeding Business Day, unless such next succeeding Business Day would
fall in the next calendar month, in which case, such Interest Period shall end
20
on the next preceding Business Day, (ii) no Interest Period with respect to a
Loan constituting a Eurodollar Loan may be selected which would end later than
the Maturity Date or the Commitment Termination Date and, (iii) interest shall
accrue from and including the first day of such Interest Period to but excluding
the last date of such Interest Period.
"Interest Rate Protection Agreement" shall mean any interest rate
swap agreement, interest rate cap agreement, synthetic cap, collar or floor or
other financial agreement or arrangement designed to manage interest rates.
"Interest Rate Type" shall have the meaning given to such term in
Section 2.3 hereof.
"Inventory" shall mean all Raw Materials, Work-in-Process and
Finished Goods held by a Credit Party in the normal course of business.
"Inventory Reserves" shall mean, as to Inventory defined as Raw
Materials, Work-in-Process or Finished Goods of a Credit Party, the sum of the
following (as to such applicable category of Inventory):
(a) a reserve for shrink, or discrepancies that arise
pertaining to Inventory quantities on hand between the applicable
Credit Party's perpetual accounting system and physical counts of the
Inventory, which will be equal to the greater of 1% or the results of
the last physical count with the variance expressed as a percentage,
for Raw Materials, Work-in-Process and Finished Goods, respectively;
(b) a reserve for Inventory that is discontinued; and
(c) any other reserve as deemed appropriate by the
Administrative Agent in its sole discretion exercised reasonably,
from time to time.
"Inventory Value" of any Inventory shall mean at the time of any
determination thereof the standard cost carried on the perpetual records of the
applicable Credit Party in accordance with their current and historical
accounting practices, in Dollars, determined in accordance with the standard
cost method of accounting less (i) any markup on Inventory from an Affiliate and
(ii) in the event variances under the standard cost method (a) are capitalized,
favorable variances shall be deducted from Eligible Inventory, and unfavorable
variances shall not be added to Eligible Inventory and (b) are expensed, a
reserve shall be determined as appropriate in order to adjust the standard cost
of Eligible Inventory to approximate actual cost.
"Investment" shall mean any stock, evidence of indebtedness or
other security of any Person, any loan, advance, contribution of capital,
extension of credit or written commitment therefor (including, without
limitation, the Guaranty of loans made to others, but excluding current trade
and customer accounts receivable arising in the ordinary course of business and
payable in accordance with customary trading terms in the ordinary course of
21
business or periodic payments made pursuant to settlements for satisfaction of
outstanding Accounts entered into in the ordinary course of business), and any
purchase of (i) any security of another Person or (ii) a line of business, or
all or substantially all of the assets, of any Person or any commitment to make
any such purchase.
"Issuing Bank" shall mean Wachovia or any other Lender which
agrees to serve as issuer of Letters of Credit hereunder.
"Joint Venture" shall mean any Person (other than a wholly owned
Subsidiary of a Credit Party) in which an equity interest is, at the time any
determination is being made, owned or controlled by a Credit Party as permitted
by this Credit Agreement.
"L/C Collateralization Deposit" shall have the meaning given to
such term in Section 2.9(a) hereof.
"L/C Exposure" shall mean, at any time, the amount expressed in
Dollars of the aggregate face amount of all drafts which may then or thereafter
be presented by beneficiaries under all Letters of Credit then outstanding plus
(without duplication), the face amount of all drafts which have been presented
or accepted under all Letters of Credit but have not yet been paid or have been
paid but not reimbursed, whether directly or from the proceeds of a Loan
hereunder.
"Lender" and "Lenders" shall mean the financial institutions
whose names appear on the signature pages hereof and any assignee of a Lender
pursuant to Section 13.3 hereof and their respective successors.
"Lending Office" shall mean, with respect to any of the Lenders,
the branch or branches (or Affiliate or Affiliates) from which such Lender's
Eurodollar Loans or Base Rate Loans, as the case may be, are made or maintained
and for the account of which all payments of principal of, and interest on, such
Lender's Eurodollar Loans or Base Rate Loans are made, as notified to the
Administrative Agent from time to time.
"Letter of Credit" shall mean a standby letter of credit issued
by the Issuing Bank pursuant to Section 2.19 hereof.
"Letter of Credit Fees" shall mean the fees payable in respect of
Letters of Credit pursuant to Section 2.19 hereof.
"LIBO Rate" shall mean, with respect to any Borrowing consisting
of Eurodollar Loans for any Interest Period, the rate per annum (rounded
upwards, if necessary, to the next 1/100 of 1%) appearing on Telerate Page 3750
(or on any successor page) as the London interbank offered rate for deposits in
dollars at approximately 11:00 a.m. (London time) two (2) Business Days prior to
the commencement of such Interest Period with a maturity comparable to such
Interest Period. In the event that such rate is not available at such time for
any reason, then the "LIBO Rate" with respect to such Borrowing of Eurodollar
Loans for such Interest Period shall be the rate per annum at which, as
determined by the Administrative Agent, dollars in an amount comparable to the
22
amount of such Borrowing are being offered to leading banks at approximately
11:00 a.m. (London time) two (2) Business Days prior to the commencement of the
applicable Interest Period for settlement in immediately available funds by
leading banks in the London interbank market for a period equal to the Interest
Period selected.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
agreement to grant a security interest at a future date, any lease in the nature
of security, and the filing of, or agreement to give, any financing statement
under the Uniform Commercial Code of any jurisdiction).
"Loan Maturity Date" shall mean the third anniversary of the
Closing Date.
"Loans" shall have the meaning given to such term in Section 2.1
hereof
"Margin Stock" shall be as defined in Regulation U of the Board.
"Material Adverse Effect" shall mean any event or condition that
(i) has a material adverse effect on the business, assets, properties,
performance, operations, condition (financial or otherwise) or prospects of the
Borrower, Guilford Automotive or the Credit Parties taken as a whole, (ii)
materially impairs the ability of the Borrower, Guilford Automotive or the
Credit Parties taken as a whole to perform their respective obligations under
any Fundamental Document to which they are or will be a party or (iii)
materially and adversely affects the Liens granted to the Collateral Agent (for
the benefit of Secured Parties) or materially impairs the validity or
enforceability of, or materially impairs the rights, remedies or benefits
available to the Collateral Agent or the Secured Parties; provided, however,
that any event or condition will be deemed to have a "Material Adverse Effect"
if such event or condition when taken together with all other events and
conditions occurring or in existence at such time (including all other events
and conditions which, but for the fact that a representation, warranty or
covenant is subject to a "Material Adverse Effect" exception, would cause such
representation or warranty contained herein to be untrue or such covenant to be
breached) would result in a "Material Adverse Effect", even though,
individually, such event or condition would not do so.
"Maximum Credit Amount" shall mean as of any date of
determination, the lesser of (i) the Total Commitment and (ii) the Borrowing
Base.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc. or if such
company shall cease to issue ratings, another nationally recognized statistical
rating company selected in good faith by mutual agreement of the Administrative
Agent and the Borrower.
"Mortgage" shall mean a Mortgage, Open End Mortgage, Deed of
Trust, Trust Deed, Deed to Secure Debt, Credit Line Deed of Trust, Assignment,
Security Agreement and Financing Statement, substantially in the form of Exhibit
D hereto, executed and delivered by any Credit Party to the Collateral Agent
(for the benefit of the Secured Parties) and in each case, as such document may
be amended, amended and restated, supplemented or otherwise modified, renewed or
replaced from time to time.
23
"Mortgage Policies" shall have the meaning given to such term in
Section 3.23(i) hereof.
"Multiemployer Plan" shall mean a plan described in Section
4001(a)(3) of ERISA to which any Credit Party or ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the five (5)
preceding plan years made or accrued an obligation to make contributions.
"Net Cash Proceeds" shall mean (a) the aggregate cash proceeds
received by a Credit Party or any Subsidiary thereof in a transaction permitted
under Section 6.7(a)(iv) or (xi) hereof (including, without limitation, as
applicable, all cash proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or otherwise, but only as and when
received) and minus (b) reasonable and customary brokerage commissions and other
reasonable and customary fees and direct expenses (including reasonable and
customary fees and expenses of counsel and investment bankers actually paid by
the applicable Credit Party or Subsidiary) related to such transaction, minus
(c) payments made to retire Indebtedness (other than the Loans) secured by any
assets being sold or otherwise disposed of where payment of such Indebtedness is
required in connection with such sale or disposition, minus (d) Restricted
Payments required to be made as a result of such sale or disposition to the
extent permitted to be made pursuant to Section 6.5(c) hereof (without
duplication); provided, that with respect to taxes, expenses shall only include
taxes to the extent that taxes are payable in cash in the current year or in the
next succeeding year with respect to the current year as a direct result of the
applicable transaction.
"Net Offering Proceeds" shall mean all cash received by a Credit
Party or any Subsidiary thereof as a result of the sale of any Capital Stock or
issuance of any Indebtedness, minus customary costs and discounts of issuance
paid by the Borrower, the proceeds of which are used in accordance with the
terms of Section 2.9 hereof to prepay outstanding Loans or other indebtedness.
"Note Agreement" shall mean the Note Agreement dated as of
October 1, 2002 pursuant to which the Borrower has issued up to $135,000,000 of
9.89% Senior Secured Notes due 2005 to its prepetition lenders in accordance
with the Plan of Reorganization, as such agreement may be further amended,
amended and restated, supplemented, modified, renewed or replaced from time to
time.
"Notes" shall mean those certain notes issued under the Note
Agreement.
"Obligations" shall mean (a) all obligations, whether direct or
indirect, contingent or absolute, of every type or description and at any time
existing, of the Borrower to make due and punctual payment of (i) principal of
and all interest on the Loans, the Fees, the Letter of Credit Fees, any
reimbursement obligations in respect of Letters of Credit, costs and attorneys'
fees and all other monetary obligations of the Borrower to the Agents, the
Issuing Bank, any Lender or any other Secured Party under or in respect of this
Credit Agreement, any note evidencing any of the Loans hereunder, any other
Fundamental Document or the Fee Letters and (ii) amounts payable to Wachovia or
any Lender in connection with any bank account maintained by the Borrower or any
24
other Credit Party at Wachovia or any Lender or any other banking services
(including, without limitation, cash management services) provided to the
Borrower or any other Credit Party by Wachovia or any Lender with respect to, or
in any way related to or otherwise required by, any of the Fundamental Documents
(including, without limitation, interest accruing at the then applicable rate
provided in this Credit Agreement after the maturity of any of the Loans, and
interest accruing at the then applicable rate provided in this Credit Agreement
after the filing of any petition in bankruptcy or the commencement of any
insolvency, reorganization or like proceeding, relating to the Borrower or any
other Credit Party, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) and (b) all other obligations of the
Borrower or any other Credit Party pursuant to this Credit Agreement or any
other Fundamental Document.
"Patent Security Agreement" shall mean a Patent Security
Agreement substantially in the form of Exhibit I hereof, as the same may be
amended, supplemented or otherwise modified, renewed or replaced from time to
time pursuant to the terms hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
"Percentage" shall mean with respect to any Lender, the
percentage of the Total Credit Exposure represented by such Lender's Credit
Exposure, or the percentage of the Commitment held by such Lender, as the
context may require.
"Permitted Liens" shall mean Liens permitted under Section 6.2
hereof.
"Person" shall mean any natural person, corporation, division of
a corporation, partnership, limited liability partnership, limited liability
company, trust, joint venture, association, company, estate, unincorporated
organization or government or any agency or political subdivision thereof.
"Plan" shall mean an employee pension benefit plan within the
meaning of Section 3(2) of ERISA, other than a Multiemployer Plan, maintained or
contributed to by any Credit Party, or any ERISA Affiliate, or otherwise
pursuant to which any Credit Party could have liability.
"Plan of Reorganization" shall mean the plan of reorganization
filed with the Bankruptcy Court on or about July 11, 2002 (as amended on August
15, 2002), with respect to those certain cases pending under Chapter 11 of the
Bankruptcy Code in the Southern District of New York by (i) the Borrower and
certain of its subsidiaries (Case Nos. 02-40666 through 02-40676 (BRL) which
cases are jointly administered as Case No. 02-40667 (BRL)), with such amendments
as may be approved by the Agents.
"Pledged Collateral" shall mean the Pledged Securities and any
proceeds or products thereof or income therefrom, in any form, together with (i)
all profits, dividends and distributions to which a Pledgor shall at any time be
entitled in respect of its Pledged Securities; (ii) all other payments, if any,
due or to become due to a Pledgor in respect of its Pledged Securities, whether
25
as contractual obligations, damages, insurance proceeds, condemnation awards or
otherwise; (iii) all of a Pledgor's claims, rights, powers, privileges,
authority, options, security interest, liens and remedies, if any, under or
arising out of the ownership of such Pledgor's Pledged Securities; (iv) all
present and future claims, if any, of a Pledgor against the applicable entity in
which such Pledgor owns its Pledged Securities or under or arising out of the
applicable partnership or operating agreement, as applicable, for monies loaned
or advanced, for services rendered or otherwise; (v) to the extent permitted by
Applicable Law, all of a Pledgor's rights, if any, under the applicable
partnership or operating agreement, as applicable, or at law, to exercise and
enforce every right, power, remedy, authority, option and privilege of such
Pledgor relating to its Pledged Securities, including, without limitation, any
power to terminate, cancel or modify the applicable partnership or operating
agreement, as applicable, to execute any instruments and to take any and all
other action on behalf of and in the name of such Pledgor in respect of its
Pledged Securities and the entity in which such Pledgor owns its Pledged
Securities, to make determinations, to exercise any election (including, but not
limited to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and authority
to demand, receive, enforce or collect any of the foregoing or any property of
the applicable entity, to enforce or execute any checks, or other instruments or
orders, to file any claims and to take any action in connection with any of the
foregoing; and (vi) to the extent not otherwise included, any and all proceeds
(as defined in Section 9-315 of the UCC) of any or all of the foregoing.
"Pledged Securities" shall mean (i) 100% of the issued and
outstanding Capital Stock of those Subsidiaries (or, in the case of foreign
Subsidiaries which are owned by the Borrower or another Credit Party, 100% of
the non-voting Capital Stock of such foreign Subsidiary, plus Capital Stock
possessing up to but not exceeding 65% of the voting power of all classes of
Capital Stock of such foreign Subsidiary entitled to vote) directly owned or
controlled by a Credit Party and initially listed on Schedule 3.21(a) hereto or
hereafter acquired by such Credit Party (other than Capital Stock specifically
designated on Schedule 3.21(a) as "Non-Pledged Capital Stock") and (ii) all
other equity interests now or hereafter owned by a Credit Party initially listed
on Schedule 3.21(a) hereto, in each case, under the heading "Pledged Capital
Stock and Other Pledged Equity Interests". Notwithstanding the foregoing, in the
event that a change in Applicable Law permits a Credit Party to pledge Capital
Stock of its foreign Subsidiary exceeding 65% of the voting power of all classes
of Capital Stock of such foreign Subsidiary without creating a material adverse
tax impact on the Borrower, "Pledged Securities" shall include all additional
Capital Stock that may be so pledged after such change in Applicable Law.
"Pledgor" shall mean a Credit Party that owns any of the Pledged
Securities.
"Preferred Stock" shall mean Capital Stock of any class or
classes (however designated) which is preferred as to the payment of dividends,
or as to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of the issuer thereof, over shares of Capital Stock
of any other class of such issuer.
26
"Premises" shall mean any real property currently or formerly
owned, leased or operated by any Credit Party or any Subsidiary of any Credit
Party, including, but not limited to, all soil, surface water, or groundwater
thereat.
"Prepayment Date" shall have the meaning given to such term in
Section 2.9(i) hereof.
"Prime Rate" shall have the meaning given to such term in the
definition of "Base Rate" set forth in this Article 1.
"Pro Forma Basis" shall mean in connection with any transaction
for which a determination on a Pro Forma Basis is required to be made hereunder,
such determination shall be made (i) after giving effect to any issuance of
Indebtedness, any acquisition, any disposition or any other transaction, as
applicable and (ii) assuming that the issuance of Indebtedness, acquisition,
disposition or other transaction and, if applicable, the application of proceeds
therefrom, occurred at the beginning of the most recent Rolling Four Quarter
period ending at least thirty (30) days prior to the date on which such issuance
of Indebtedness, acquisition, disposition or other transaction occurred in
accordance with Article 11 of Regulation S-X of the Securities Exchange Act of
1934, as amended.
"Proprietary Rights" shall have the meaning given to such term in
Section 3.8(a) hereof.
"Purchasing Lender" shall have the meaning given to such term in
Section 2.13(e).
"Raw Materials" shall mean materials used or consumed in the
manufacturing of goods to be sold by a Credit Party in the ordinary course of
business, such as ▇▇▇▇▇ of cotton, ▇▇▇▇▇ of greasy wool and purchased yarn.
"Real Property Assets" shall mean as of any time, all parcels of
real property, owned or leased at such time directly or indirectly by any Credit
Party, together with in each case, all buildings, improvements, appurtenant
fixtures and equipment, easements and other property and rights incidental to
the ownership or lease (as applicable) of such parcel of real property or any of
the foregoing.
"Register" shall have the meaning given to such term in Section
13.3(e).
"Regulation D" shall mean Regulation D of the Board as from time
to time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation T" shall mean Regulation T of the Board as from time
to time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation U" shall mean Regulation U of the Board as from time
to time in effect and all official rulings and interpretations thereunder or
thereof.
27
"Regulation X" shall mean Regulation X of the Board as from time
to time in effect and all official rulings and interpretations thereunder or
thereof.
"Release" shall mean any discharging, disposing, emitting,
leaking, pumping, pouring, emptying, injecting, escaping, leaching, dumping or
spilling of any Hazardous Material into the Environment.
"Renewal Fee" shall mean the annual renewal fee paid to the
Administrative Agent on each anniversary of the Closing Date up to but excluding
the Loan Maturity Date pursuant to the Fee Letter.
"Reportable Event" shall mean any reportable event as defined in
Section 4043(c) of ERISA other than those events as to which the 30-day notice
period is waived under subsection .22, .23, .25, .27 or .28 of PBGC Regulation
Section 4043.
"Required Lenders" shall mean Lenders having Credit Exposure
greater than fifty percent (50%) of the Total Credit Exposure; provided, that
for purposes of this definition, the Credit Exposure of a Lender shall be
disregarded if and for so long as such Lender shall be a Defaulting Lender.
"Requirements" shall mean all present and future laws, statutes,
codes, ordinances, orders, judgments, decrees, injunctions, rules, regulations
and requirements of every Governmental Authority having jurisdiction over any
Real Property Asset and all restrictive covenants applicable to any Real
Property Asset.
"Restricted Payment" shall mean (i) any distribution, dividend or
other direct or indirect payment on account of shares of any class of Capital
Stock of a Credit Party, (ii) any redemption or other acquisition,
re-acquisition or retirement by a Credit Party of any shares of any class of its
own Capital Stock or the Capital Stock of another Credit Party or an Affiliate,
now or hereafter outstanding, (iii) any payment made to retire, or obtain the
surrender of, any outstanding warrants, puts or options or other rights to
purchase or otherwise acquire shares of any Capital Stock of a Credit Party or
an Affiliate, now or hereafter outstanding and (iv) any payment by a Credit
Party of principal of, premium, if any, or interest on, or any redemption,
purchase, retirement, defeasance, sinking fund or similar payment with respect
to any Indebtedness now or hereafter outstanding which Indebtedness is
subordinated to any of the Obligations.
"Rolling Four Quarters" shall mean, with respect to any date of
determination, the fiscal quarter then ended and the three (3) immediately
preceding fiscal quarters considered as a single period.
"S&P" shall mean Standard & Poor's Ratings Group (a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.) or, if such company shall cease to issue
ratings, another nationally recognized statistical rating company selected in
good faith by mutual agreement of the Administrative Agent and the Borrower.
28
"Secured Parties" shall mean the Agents, the Issuing Bank, the
Lenders and each of their respective successors and assigns.
"Subordinated Security Agreement" shall mean that certain
Guaranty, Security and Pledge Agreement, dated as of October 1, 2002, by and
among each of the Credit Parties, Wachovia, as the beneficiary of the A-Advanced
Guaranty, each of the holders of the Notes issued under the Note Agreement and
the Collateral Agent.
"Subsidiary" shall mean with respect to any Person, any
corporation, association, joint venture, partnership or other business entity
(whether now existing or hereafter organized) of which at least a majority of
the voting stock or other ownership interests having ordinary voting power for
the election of directors (or the equivalent) is, at the time as of which any
determination is being made, owned or controlled by such Person or one or more
subsidiaries of such Person or by such Person and one or more subsidiaries of
such Person.
"Title Company" shall mean Fidelity National Title Insurance
Company or another title insurance company of recognized national standing which
is reasonably acceptable to the Collateral Agent.
"Total Credit Exposure" shall mean an amount equal to (i) the
aggregate principal amount of all outstanding Loans hereunder, plus (ii) the
then current amount of L/C Exposure, plus (iii) the aggregate amount of the
unused Total Commitment then in effect.
"Total Funded Debt" shall mean with respect to the Borrower and
its Consolidated Subsidiaries, all Indebtedness of the Borrower and its
Consolidated Subsidiaries which (i) as of the date of the creation or incurrence
thereof, by its terms matures in, or at the Borrower's or such Subsidiary's
option can be extended for, one year or more from such date of creation or
incurrence (including current portions of such long-term Indebtedness),
including all hedging agreements and letters of credit entered into in
connection with such Indebtedness and (ii) should be shown on the consolidated
balance sheet of the Borrower and its Subsidiaries in accordance with GAAP. The
term "Total Funded Debt" shall include, without limitation, the Notes.
"Total Leverage Ratio" shall mean, at any date for which such
ratio is to be determined, the ratio of Indebtedness of the Borrower and its
Consolidated Subsidiaries at such date to Consolidated EBITDA for the most
recent Rolling Four Quarter period; provided that (i) with respect to the first
quarter of the Borrower's fiscal year 2003, in calculating such ratio, EBITDA
will be determined for such quarter on an annualized basis, (ii) with respect to
the second quarter of the Borrower's fiscal year 2003, in calculating such
ratio, EBITDA will be determined for the first two quarters of such fiscal year
on an annualized basis and (iii) with respect to the third quarter of the
Borrower's fiscal year 2003, in calculating such ratio, EBITDA will be
determined for the first three quarters of such fiscal year on an annualized
basis.
"Total Commitment" shall mean the aggregate amount of the
Commitments then in effect of all of the Lenders, as such amount may be reduced
or modified from time to time in accordance with the terms of this Credit
Agreement.
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"UCC" shall mean the Uniform Commercial Code as in effect in the
State of New York from time to time.
"Uniform Customs" shall have the meaning given to such term in
Section 2.18(c) hereof.
"Unused Availability" shall mean, at any time, (i) the Borrowing
Base less (ii) the sum of (x) the aggregate outstanding principal amount of all
Loans and (y) the aggregate L/C Exposure.
"Wachovia" shall mean Wachovia Bank, National Association.
"Work-in-Process" shall mean yarn that has been removed from
standard packaging and as to which the warping and/or the production process has
begun and which has not been completed, tested and prepared for shipment as
Finished Goods.
2. THE LOANS
SECTION 2.1 Loans. (a) Each Lender, severally and not jointly,
agrees, upon the terms and subject to the conditions hereinafter set forth, to
make loans equal to such Lender's Commitment (each a "Loan" and collectively,
the "Loans") to the Borrower on any Business Day and from time to time from the
Closing Date to but excluding the Commitment Termination Date; provided, that
such Loans when added to the aggregate principal amount of all Loans then
outstanding to the Borrower from all Lenders, plus all Lenders' Percentage of
the then current L/C Exposure, does not exceed the Maximum Credit Amount (after
giving effect to all Loans repaid and all reimbursements of Letters of Credit
made concurrently with the making of any Loans).
(b) The Loans shall be used to finance the Borrower's obligations
under the Plan of Reorganization (including refinancing the DIP Facility to the
extent of any outstanding amounts), Fees and other expenses incurred in
connection with this Credit Agreement and for general corporate purposes
(including working capital expenditures) in accordance with the provisions of
this Credit Agreement.
(c) Each Loan requested hereunder on any date shall be made by
each Lender ratably in accordance with its Percentage.
(d) Subject to the terms and conditions of this Credit Agreement,
at any time prior to the Commitment Termination Date, the Borrower may borrow,
repay and re-borrow amounts constituting the Loans.
SECTION 2.2 Disbursement of Funds and Notice of Borrowing. (a)
The Borrower shall give the Administrative Agent and each Lender prior written,
facsimile or telephonic (promptly confirmed in writing) notice of each Borrowing
hereunder; such notice shall be irrevocable and to be effective, must be
received by the Administrative Agent and each Lender not later than 10:00 am
(Eastern time), (i) in the case of Base Rate Loans, on the Business Day on which
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such Loan is to be made and (ii) in the case of Eurodollar Loans, on the third
Business Day preceding the date on which such Loan is to be made. Each such
written notice or written confirmation of telephonic notice shall be given in
substantially the form of the Borrowing Certificate appropriately completed to
specify (A) the amount of the proposed Borrowing, (B) the date thereof (which
shall be a Business Day) and (C) whether the Loan(s) then being requested are to
be (or what portion or portions thereof are to be) a Base Rate Loan or a
Eurodollar Loan and the Interest Period or Interest Periods with respect thereto
in the case of Eurodollar Loans. In the case of a Eurodollar Loan, if no
election of an Interest Period is specified in such notice, such notice shall be
deemed a request for an Interest Period of one month. If no election is made as
to the Interest Rate Type of any Loan, such notice shall be deemed a request for
a Base Rate Loan.
(b) The Administrative Agent shall promptly confirm to each
Lender its proportionate share of each Borrowing, the date of such Borrowing,
the Interest Rate Type of each Loan being requested and the Interest Periods
applicable thereto. On the borrowing date specified in such notice, each Lender
shall make its proportionate share of the Borrowing available at the office of
the Administrative Agent, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: Syndication Agency Services for credit to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc. and in
each case, no later than 2:00 p.m. Eastern time in the case of a Borrowing
consisting of Base Rate Loans and 1:00 p.m. Eastern time in the case of a
Borrowing consisting of Eurodollar Loans, in Federal or other immediately
available funds.
(c) Notwithstanding any provision to the contrary in this Credit
Agreement, the Borrower shall not, in any notice of Borrowing under this Section
2.4 request any Eurodollar Loan which, if made, would result in an aggregate of
more than three (3) separate Eurodollar Loans of any Lender being outstanding
hereunder at any one time. For purposes of the foregoing, Eurodollar Loans
having Interest Periods commencing and ending on the same days shall be
considered one (1) single Eurodollar Loan.
(d) The aggregate amount of any Borrowing of a Loan consisting of
a Eurodollar Loan shall be in a minimum aggregate principal amount of $1,000,000
or such greater amount which is an integral multiple of $100,000, and the
aggregate amount of any Borrowing of a Loan consisting of a Base Rate Loan shall
be in a minimum aggregate principal amount of $100,000 or such greater amount
which is an integral multiple of $10,000 (or such lesser amount as shall equal
(i) the available but unused portion of the Total Credit Commitment then in
effect or (ii) the amount necessary to fund a drawing under a Letter of Credit).
(e) The Administrative Agent shall disburse the proceeds of Loans
by depositing them (other than a Loan used to fund a drawing under a Letter of
Credit) on the date of the Borrowing in an account of the Borrower as the
Borrower may specify to the Administrative Agent in writing.
SECTION 2.3 Interest Rate Type of the Loans. Each Loan shall be
either a Base Rate Loan or Eurodollar Loan (each such type of Loan, an "Interest
Rate Type") as the Borrower may request either (i) in its notice of Borrowing
delivered to the Administrative Agent pursuant to Section 2.2(a) hereof or (ii)
as such Loan may be continued or converted pursuant to the provisions of Section
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2.11 hereof). Subject to Sections 2.13(d) and 2.15(g) hereof, each Lender may at
its option fulfill its obligations hereunder with respect to any Eurodollar Loan
by causing a foreign Lending Office to make such Loan; provided, that any
exercise of such option shall not affect the obligation of the Borrower to repay
such Loan in accordance with the terms hereof and of any note evidencing such
Loan. Subject to the other provisions of Section 2.3, Section 2.10(b) and
Section 2.14, Loans of more than one Interest Rate Type may be outstanding at
the same time.
SECTION 2.4 Repayment; Evidence of Debt; Administration. (a) The
Loans shall be subject to voluntary prepayment as provided in Section 2.8
hereof, to mandatory prepayment as provided in Section 2.9 hereof and
acceleration as provided in Article 7 hereof.
(b) The outstanding principal balance of the Loans shall be
payable in full on the Commitment Termination Date.
(c) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(d) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each outstanding Loan hereunder, the Interest
Rate Type thereof and the Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(e) The entries made in the accounts maintained pursuant to
paragraph (c) or (d) of this Section 2.4 shall be prima facie evidence of the
existence and amounts of the Obligations recorded therein; provided, however,
that the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligation of
the Borrower to repay the Loans and other Obligations in accordance with the
terms of this Credit Agreement.
(f) Any Lender may request that Loans made by it be evidenced by
a promissory note or notes. In such event, the Borrower shall promptly prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns), in substantially the form of Exhibit E hereto. Thereafter, the Loans
evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 13.3 hereof) be represented by
one or more promissory notes in such form payable to the order of the payee
named therein.
(g) All amounts received by the Administrative Agent from or on
behalf of the Borrower as a payment or prepayment of, or interest on the Loans
shall be applied among the Lenders holding the Loans, ratably in accordance with
the outstanding Loans owed to each such Lender.
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SECTION 2.5 Interest. (a) In the case of a Base Rate Loan, interest shall be
payable at a rate per annum (computed on the basis of the actual number of days
elapsed over a year of 360 days) equal to the Base Rate plus the Applicable
Interest Margin. Interest shall be payable in arrears on each Base Rate Loan on
each Interest Payment Date and on the Commitment Termination Date.
(b) In the case of a Eurodollar Loan, interest shall be payable
at a rate per annum (computed on the basis of the actual number of days elapsed
over a year of 360 days) equal to the Adjusted LIBO Rate plus the Applicable
Interest Margin. Interest shall be payable on each Eurodollar Loan on each
Interest Payment Date and on the Commitment Termination Date. The Administrative
Agent shall determine the applicable Adjusted LIBO Rate for each Interest Period
as soon as practicable on the date when such determination is to be made in
respect of such Interest Period and shall promptly notify the Borrower and the
Lenders of the applicable interest rate so determined. Such determination shall
be conclusive absent manifest error.
(c) Interest in respect of any Loan hereunder shall accrue from
and including the date of such Loan to but excluding the date on which such Loan
is paid or, if applicable, converted to a Loan of a different Interest Rate
Type.
(d) Anything in this Credit Agreement or in any note evidencing
any Loan hereunder to the contrary notwithstanding, the interest rate on the
Loans or with respect to any drawing under a Letter of Credit shall in no event
be in excess of the maximum rate permitted by Applicable Law.
SECTION 2.6 Commitment Fees and Other Fees. (a) The Borrower
agrees to pay to the Administrative Agent for the account of each Lender
quarterly in arrears on the last Business Day of each March, June, September and
December (commencing the last Business Day of December 2002) prior to the
Commitment Termination Date, on the date of any termination or reduction of the
Total Commitment, and on the Commitment Termination Date, a fee (the "Commitment
Fee") at a rate per annum (computed on the basis of the actual number of days
elapsed during the period over a year of 360 days) equal to one half of one
percent (0.50%) of the average daily amount during the preceding period by which
such Lender's Commitment (as such Commitment may be modified in accordance with
the provisions of this Credit Agreement) exceeded the sum of (i) the product of
such Lender's Percentage and the L/C Exposure plus (ii) the aggregate principal
amount of such Lender's outstanding Loans. The Commitment Fee shall be paid at a
rate per annum.
(b) The Commitment Fees shall commence to accrue on the Closing
Date.
(c) The Borrower agrees to pay to the applicable party, on the
Closing Date, any and all Fees, expenses and other amounts that are then due and
payable pursuant to the Fee Letters and, thereafter, any and all Fees, expenses
and other amounts payable thereunder when due and payable.
SECTION 2.7 Termination and/or Reduction of the Total Commitment.
(a) Upon at least three (3) Business Days' prior written, facsimile or
33
telephonic notice (provided, that such telephonic notice is immediately followed
by written confirmation) to the Administrative Agent, the Borrower may at any
time in whole permanently terminate, or from time to time in part permanently
reduce, the Total Commitment. In the case of a partial reduction, each such
reduction shall be in a minimum aggregate principal amount of $1,000,000 or an
integral multiple thereof; provided, however, that the Total Commitment may not
be reduced to an amount less than the aggregate principal amount of all Loans
then outstanding, plus the then current L/C Exposure.
(b) Any partial reduction of the Total Commitment, hereunder
shall be made among the Lenders, ratably in accordance with their respective
Percentages.
(c) Simultaneously with each termination or reduction of the
Total Commitment, the Borrower shall pay to the Administrative Agent for the
benefit of the Lenders, all accrued and unpaid Commitment Fees on the amount of
the Total Commitment so terminated or reduced through the date of such
termination or reduction.
SECTION 2.8 Voluntary Prepayments. The Borrower shall have the
right at its option at any time and from time to time to prepay (i) any Base
Rate Loan, in whole or in part, upon same day prior written, facsimile, or
telephonic (promptly confirmed in writing) notice to the Administrative Agent
received not later than 11:30 a.m. (Eastern time) on such day, in the principal
amount of $100,000 or such greater amount which is an integral multiple of
$100,000 if prepaid in part and (ii) any Eurodollar Loan, in whole or in part,
upon same day prior written, facsimile, or telephonic (promptly confirmed in
writing) notice received not later than 11:30 a.m. (Eastern time) on such day,
in the principal amount of $1,000,000 or such greater amount which is an
integral multiple of $100,000 if prepaid in part; provided, that in the case of
Eurodollar Loans the Borrower pays any amounts required to be paid under Section
2.12 as a result of such prepayment. Each notice of prepayment shall specify the
prepayment date, each Loan to be prepaid and the principal amount thereof, shall
be irrevocable and shall commit the Borrower to prepay each such Loan in the
amount and on the date stated therein.
SECTION 2.9 Mandatory Prepayments. (a) If at any time the sum of
the aggregate principal amount of all Loans outstanding, plus the then current
L/C Exposure shall exceed the Maximum Credit Amount (the "Excess"), then (i) if
the Excess is less than or equal to the amount of the Loans, the Borrower shall
immediately prepay such Loans in the amount of such Excess; and (ii) if the
Excess exceeds the amount of such Loans, the Borrower shall immediately prepay
the Loans in full and cash collateralize the L/C Exposure in the amount of the
remaining Excess after repayment of the Loans by delivering to the
Administrative Agent cash or Cash Equivalents in the amount equal to 105% of
such Excess or other security acceptable to the Issuing Bank and the Required
Lenders (an "L/C Collateralization Deposit"). Any L/C Collateralization Deposit
shall be applied to reimburse the Issuing Bank for the amount of any amounts
drawn under Letters of Credit and any Letter of Credit Fees and other costs
associated with the Letters of Credit; provided, however, that if after an L/C
Collateralization Deposit is made by the Borrower and prior to the Commitment
Termination Date, no Default or Event of Default is then continuing and the
Excess decreases, then the Administrative Agent shall apply the L/C
Collateralization Deposit in an amount equal to the amount of the decrease of
34
the Excess as follows: first, to prepay the outstanding obligations under the
Note Agreement if the Borrower was required to make such L/C Collateralization
Deposit as a direct result of any event described in clauses (c) through (f) of
this Section 2.9, and second, to the Borrower.
(b) Within two (2) Business Days of the receipt of any payments
of proceeds by the Borrower arising from the Borrower's beneficial interest in
the Altamira Trust (including, without limitation, Net Cash Proceeds related to
a sale of the Altamira Trust Assets (after payment in full of the notes issued
by the Altamira Trust), the Borrower shall prepay Loans in an amount equal to
100% of the proceeds received by the Borrower.
(c) Within two (2) Business Days of the receipt of any Net Cash
Proceeds by the Borrower or any Credit Party, the Borrower shall prepay Loans in
an amount equal to 100% of the Net Cash Proceeds received by such Credit Party;
provided, that no prepayment shall be required to the extent such Net Cash
Proceeds (x) result from the sale of an asset (other than a Real Property Asset)
in the ordinary course of business of the Borrower and its Subsidiaries, (y) are
reinvested in the purchase of assets to be used in the business of Credit
Parties within 90 days of the receipt of such Net Cash Proceeds so long as
pending such reinvestment any such Net Cash Proceeds are held in the Cash
Collateral Account and the aggregate amount so held does not at any time exceed
$1,000,000 or (z) result from the sale or other transfer to the Altamira Trust
or the Discontinued Operations Trust of an asset (or proceeds thereof) listed on
Schedule 2.9(c) hereof after the Closing Date.
(d) Within two (2) Business Days following the receipt by the
Borrower or any other Credit Party (or by the Collateral Agent as loss payee) of
any payment of proceeds of any insurance required to be maintained pursuant to
this Credit Agreement or any other Fundamental Document on account of each
separate loss, damage or injury to any tangible real or personal property of the
Borrower or any of its Subsidiaries (provided, that, so long as no Default or
Event of Default shall have occurred and then be continuing, such proceeds (or
any portion thereof) may be expended or irrevocably committed by the Borrower or
any of its Subsidiaries to repair or replace such property within 90 days of
such loss, damage or injury and the Borrower shall furnish to the Administrative
Agent and the Collateral Agent evidence satisfactory to the Administrative Agent
and the Collateral Agent of such expenditure or commitment and shall have
certified to the Administrative Agent and the Collateral Agent that such
proceeds (or such proceeds together with other funds available to the Borrower)
are sufficient to repair or replace such property pending which the Collateral
Agent shall hold such proceeds), the Borrower shall prepay or, to the extent the
Collateral Agent is loss payee under any insurance policy, irrevocably direct
the Collateral Agent to apply as a prepayment of the Loans, an amount equal to
100% (or such lesser percentage which represents that portion of such proceeds
not expended or committed pursuant to the immediately preceding parenthetical
phrase) of such insurance proceeds; provided, that if an Event of Default shall
have occurred and be continuing, all proceeds of insurance required to be
maintained pursuant to this Credit Agreement or any other Fundamental Document
which would otherwise be payable to the Borrower shall be paid to the Collateral
Agent and applied pursuant to Section 12.2(b).
35
(e) Within two (2) Business Days of the receipt of any Net
Offering Proceeds from any sale of Capital Stock by the Borrower or any other
Credit Party, the Borrower shall prepay Loans in an amount equal to 50% of such
Net Offering Proceeds received.
(f) So long as no Default or Event of Default has occurred and is
then continuing, at any time the Borrower or any other Credit Party receives Net
Offering Proceeds from the issuance of Indebtedness (other than as described in
Section 6.1 hereof ), then within two (2) Business Days of the receipt of such
Net Offering Proceeds, the Borrower shall prepay the Loans in an amount equal to
100% of such Net Offering Proceeds received.
(g) Any prepayments required under Section 2.9(b), (c), (d), (e)
or (f) shall be applied: (i) first to the outstanding principal balance of the
Loans ratably in accordance with each Lender's proportionate share of Loans and
(ii) second to the extent the amount of such prepayment exceeds the outstanding
Loans, the outstanding principal balance of the Notes (subject to the terms of
the Note Agreement).
(h) All prepayments of Loans under this Section 2.9 shall, as
regards Interest Rate Type, be applied first to Base Rate Loans, and subject to
Section 2.9(j) hereof, then to Eurodollar Loans in the order of the scheduled
expiry of Interest Periods with respect thereto (i.e. those Eurodollar Loans
with Interest Periods which end sooner would be paid before those with Interest
Periods which end later).
(i) All prepayments under this Section 2.9 shall be accompanied
by accrued but unpaid interest on the principal amount being prepaid to (but not
including) the date of prepayment.
(j) If on any day on which Loans would otherwise be required to
be prepaid pursuant to this Section 2.9, but for the operation of this Section
2.9(j) (each a "Prepayment Date"), the amount of such required prepayment
exceeds the then outstanding aggregate principal amount of Base Rate Loans, and
no Default or Event of Default exists or is continuing, then on such Prepayment
Date, (i) the Borrower shall either (1) prepay outstanding Eurodollar Loans in
an amount equal to such excess, together with any applicable costs set forth in
Section 2.12(a) hereof or (2) in lieu of prepaying outstanding Eurodollar Loans,
deposit Dollars into the Cash Collateral Account in an amount equal to such
excess, and only the outstanding Base Rate Loans shall be required to be prepaid
on such Prepayment Date and (ii) on the last day of each Interest Period after
such Prepayment Date in effect with respect to a Eurodollar Loan, the
Administrative Agent is irrevocably authorized and directed to apply funds from
the Cash Collateral Account (and liquidate investments held in the Cash
Collateral Account as necessary) to prepay such Eurodollar Loans for which the
Interest Period is then ending to the extent funds are available in the Cash
Collateral Account.
SECTION 2.10 Default Interest; Alternate Rate of Interest. (a) In
the event that, and for so long as, any Event of Default shall have occurred and
be continuing, the Borrower shall on demand from time to time pay interest, to
the extent permitted by Applicable Law, on all Loans and overdue amounts
outstanding up to (but not including) the date of actual payment of such Loan or
overdue amount (after as well as before judgment) (i) for the remainder of the
36
then current Interest Period for each Eurodollar Loan, at two percent (2%) in
excess of the rate then in effect for each such Eurodollar Loan and (ii) for all
periods subsequent to the then current Interest Period for each Eurodollar Loan
and for all Base Rate Loans at two percent (2%) in excess of the rate then in
effect for Base Rate Loans.
(b) In the event, and on each occasion, that on or before the day
on which the Adjusted LIBO Rate for a Eurodollar Loan is to be determined as set
forth herein, (i) the Administrative Agent shall have received notice from any
Lender of such Lender's determination (which determination, absent manifest
error, shall be conclusive) that Dollar deposits in an amount equal to the
principal amount of such Lender's Eurodollar Loan are not generally available in
the London Interbank Market or that the rate at which such Dollar deposits are
being offered will not adequately and fairly reflect the cost to such Lender of
making or maintaining the principal amount of such Lender's Eurodollar Loan
during the applicable Interest Period or (ii) the Administrative Agent shall
have determined that reasonable means do not exist for ascertaining the
applicable Adjusted LIBO Rate, the Administrative Agent shall, as soon as
practicable thereafter, give written or facsimile notice of such determination
by such Lender or the Administrative Agent to the Borrower and the Lenders and
any request by the Borrower for a Eurodollar Loan pursuant to Section 2.2 or
conversion to or continuation as a Eurodollar Loan pursuant to Section 2.11,
made after receipt of such notice and until the circumstances giving rise to
such notice no longer exist, shall be deemed to be a request for a Base Rate
Loan; provided, however, that in the circumstances described in clause (i)
above, such deemed request shall only apply to the affected Lender's portion
thereof.
SECTION 2.11 Continuation and Conversion of Loans. The Borrower
shall have the right, at any time, (i) to convert any Eurodollar Loan or portion
thereof to a Base Rate Loan or to continue any Eurodollar Loan for a successive
Interest Period, or (ii) to convert any Base Rate Loan or portion thereof to a
Eurodollar Loan, subject to the following:
(a) at least three (3) Business Days prior to any conversion or
continuation hereunder, the Borrower shall give the Administrative Agent
written, facsimile or telephonic (promptly confirmed in writing) notice with
respect thereto; such notice shall be irrevocable and to be effective, must be
received by the Administrative Agent on the day required not later than 11:30
a.m. Eastern time;
(b) unless the Required Lenders otherwise consent, no Event of
Default shall have occurred and be continuing at the time of any conversion to a
Eurodollar Loan or continuation of a Eurodollar Loan into a subsequent Interest
Period;
(c) the aggregate principal amount of Loans continued as, or
converted to, Eurodollar Loans as part of the same continuation or conversion,
shall be in a minimum amount of $1,000,000 or in such greater amount which is an
integral multiple of $100,000;
(d) no Base Rate Loan (or portion thereof) may be converted to a
Eurodollar Loan and no Eurodollar Loan may be continued as a Eurodollar Loan if,
after such conversion or continuation, and after giving effect to any concurrent
prepayment of Loans, an aggregate of more than the number of separate Eurodollar
Loans permitted under Section 2.2(c) hereof would be outstanding hereunder;
37
(e) the Interest Period with respect to a new Eurodollar Loan
effected by a continuation or conversion shall commence on the date of such
continuation or conversion;
(f) if a Eurodollar Loan is converted to a Base Rate Loan other
than on the last day of the Interest Period with respect thereto, the amounts
required by Section 2.12 shall be paid upon such conversion;
(g) accrued interest on a Eurodollar Loan (or portion thereof)
being converted to a Base Rate Loan shall be paid by the Borrower at the time of
conversion; and
(h) each request for a continuation as, or conversion to, a
Eurodollar Loan which fails to state an applicable Interest Period shall be
deemed to be a request for an Interest Period of one month.
Subject to the foregoing, in the event that the Borrower shall not give notice
to continue or convert any Eurodollar Loan as provided above, such Loan (unless
repaid) shall automatically be converted to a Base Rate Loan at the expiration
of the then current Interest Period. The Administrative Agent shall, after it
receives notice from the Borrower, promptly give the Lenders notice of any
continuation or conversion.
SECTION 2.12 Reimbursement of Lenders. (a) The Borrower shall
reimburse each Lender on demand for any loss incurred or to be incurred by such
Lender in the re-employment of the funds released (i) by any prepayment or
conversion (for any reason whatsoever) of a Eurodollar Loan if such Loan is
prepaid or converted prior to the last day of the Interest Period for such Loan
or (ii) in the event that after the Borrower delivers a notice of borrowing
under Section 2.2 or notice of continuation or conversion under Section 2.11 in
respect of a Eurodollar Loan, such Loan is not made, continued or converted on
the first day of the Interest Period specified in the applicable notice for any
reason other than (I) a suspension or limitation under Section 2.10(b) of the
right of the Borrower to select a Eurodollar Loan or (II) a breach by such
Lender of its obligation to fund such Borrowing when it was otherwise required
to do so hereunder. Such loss shall be the amount as reasonably determined by
such Lender as the excess, if any, of (A) the amount of interest which would
have accrued to such Lender on the amount so paid or not borrowed, continued or
converted at a rate of interest equal to the interest rate applicable to such
Loan pursuant to Section 2.5 hereof, for the period from the date of such
payment or failure to borrow, continue or convert to the last day (x) in the
case of a payment prior to the last day of the Interest Period for such Loan, of
the then current Interest Period for such Loan, or (y) in the case of a failure
to borrow, continue or convert, of the Interest Period for such Loan which would
have commenced on the date of such failure to borrow, continue or convert, over
(B) the amount realized by such Lender in re-employing the funds not advanced or
the funds received in prepayment or realized from the Loan not so continued or
converted during the period referred to above. Each Lender shall deliver to the
Borrower and to the Administrative Agent from time to time one or more
certificates setting forth the amount of such loss (and in reasonable detail the
manner of computation thereof) as determined by such Lender, which certificates
shall be conclusive absent manifest error. The Borrower shall pay such Lender
the amounts shown on such certificate within ten (10) days of the Borrower's
receipt of such certificate.
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(b) In the event the Borrower fails to prepay any Loan on the
date specified in any prepayment notice delivered pursuant to Section 2.8, the
Borrower on demand by any Lender, shall pay to the Administrative Agent for the
account of such Lender any amounts required to compensate such Lender for any
actual loss incurred by such Lender as a result of such failure to prepay,
including, without limitation, any loss, cost or expenses incurred by reason of
the acquisition of deposits or other funds by such Lender to fulfill obligations
incurred in anticipation of such prepayment. Each Lender shall deliver to the
Borrower and to the Administrative Agent from time to time one or more
certificates setting forth the amount of such loss (and in reasonable detail the
manner of computation thereof) as determined by such Lender, which certificates
shall be conclusive absent manifest error. The Borrower shall pay the
Administrative Agent for the account of such Lender the amounts shown on such
certificate within ten (10) days of the Borrower's receipt of such certificate.
SECTION 2.13 Change in Circumstances. (a) In the event that after
the Initial Date, any change in Applicable Law or in the interpretation or
administration thereof (including, without limitation, any request, guideline or
policy not having the force of law) by any Governmental Authority charged with
the administration or interpretation thereof or, with respect to clauses (ii),
(iii) or (iv) below any changes in conditions, shall occur which shall:
(i) subject any Lender to, or increase the net amount of, any
tax, levy, impost, duty, charge, fee, deduction or withholding with
respect to any Eurodollar Loan (other than withholding tax imposed by
the United States of America or any political subdivision or taxing
authority thereof or therein or any other tax, levy, impost, duty,
charge, fee, deduction or withholding (x) that is measured with respect
to the overall net income of such Lender or of a Lending Office of such
Lender, and that is imposed by the United States of America, or by the
jurisdiction in which such Lender or Lending Office is incorporated, in
which such Lending Office is located, managed or controlled or in which
such Lender has its principal office or a presence not otherwise
connected with, or required by, this transaction (or any political
subdivision or taxing authority thereof or therein), or (y) that is
imposed solely by reason of any Lender failing to make a declaration of,
or otherwise to establish, nonresidence, or to make any other claim for
exemption, or otherwise to comply with any certification,
identification, information, documentation or reporting requirements
prescribed under the laws of the relevant jurisdiction, in those cases
where a Lender may properly make such declaration or claim or so
establish nonresidence or otherwise comply); or
(ii) change the basis of taxation of any payment to any Lender
of principal of or interest on any Eurodollar Loan or other fees and
amounts payable to any Lender hereunder, or any combination of the
foregoing, other than withholding tax imposed by the United States of
America or any political subdivision or taxing authority thereof or
therein or any other tax, levy, impost, duty, charge, fee, deduction or
withholding that is measured with respect to the overall net income of
such Lender or of a Lending Office of such Lender, and that is imposed
by the United
39
States of America, or by the jurisdiction in which such Lender
or Lending Office is incorporated, in which such Lending Office is
located, managed or controlled or in which such Lender has its principal
office or a presence not otherwise connected with, or required by, this
transaction (or any political subdivision or taxing authority thereof or
therein); or
(iii) impose, modify or deem applicable any reserve, deposit or
similar requirement against any assets held by, deposits with or for the
account of, or loans or commitments by, an office of such Lender with
respect to any Eurodollar Loan; or
(iv) impose upon such Lender or the London Interbank Market any
other condition with respect to the Eurodollar Loans or this Credit
Agreement;
and the result of any of the foregoing shall be to increase the actual cost to
such Lender of making or maintaining any Eurodollar Loan hereunder or to reduce
the amount of any payment (whether of principal, interest or otherwise) received
or receivable by such Lender in connection with any Eurodollar Loan hereunder,
or to require such Lender to make any payment in connection with any Eurodollar
Loan hereunder, in each case by or in an amount which such Lender in its sole
judgment shall deem material, then and in each case, the Borrower agrees to pay
to the Administrative Agent for the account of such Lender, in accordance with,
and as provided in, paragraph (c) below, such amounts as shall be necessary to
compensate such Lender for such cost, reduction or payment.
(b) If at any time and from time to time after the Initial Date,
any Lender shall have determined that the applicability of any law, rule,
regulation or guideline regarding capital adequacy which is adopted after the
Initial Date, or any change in any law, rule, regulation or guideline regarding
capital adequacy or in the interpretation or administration of any of the
foregoing by any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof, or the compliance by
any Lender (or any Lending Office of such Lender) or any Lender's holding
company with any request or directive issued after the Initial Date regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Lender's capital or on the capital of such Lender's
holding company, if any, as a consequence of this Credit Agreement or the Loans
made or Letters of Credit issued pursuant hereto to a level below that which
such Lender or such Lender's holding company could have achieved but for such
applicability, adoption, change or compliance (taking into consideration such
Lender's policies and the policies of such Lender's holding company with respect
to capital adequacy) by an amount deemed by such Lender in its sole judgment to
be material, then from time to time the Borrower agrees to pay to the
Administrative Agent for the account of such Lender, in accordance with, and as
provided in, paragraph (c) below, such additional amount or amounts as will
compensate such Lender or such Lender's holding company for any such reduction
suffered to the extent attributable to this Credit Agreement or the Loans made
or Letters of Credit issued pursuant hereto.
(c) Each Lender shall deliver to the Borrower and to the
Administrative Agent from time to time one or more certificates setting forth
the amounts due to such Lender under paragraph (a) or (b) above, the changes as
40
a result of which such amounts are due and the manner of computing such amounts.
Each such certificate shall be conclusive in the absence of manifest error. The
Borrower shall pay to the Administrative Agent for the account of each such
Lender the amounts shown as due on any such certificate within ten (10) days
after the Borrower's receipt of the same. No failure on the part of any Lender
to demand compensation under paragraph (a) or (b) above on any one occasion
shall constitute a waiver of its right to demand such compensation on any other
occasion. The protection of this Section 2.13 shall be available to each Lender
regardless of any possible contention of the invalidity or inapplicability of
any law, regulation or other condition which shall give rise to any demand by
such Lender for compensation hereunder.
(d) Each Lender agrees that after it becomes aware of the
occurrence of an event or the existence of a condition that (i) would cause it
to incur any increased cost hereunder or render it unable to perform its
agreements hereunder for the reasons specifically set forth in Section 2.10(b),
this Section 2.13, Section 2.14 or Section 2.18(g) or (ii) would require the
Borrower to pay an increased amount under Section 2.10(b), this Section 2.13,
Section 2.14 or Section 2.18(g), it will use reasonable efforts to notify the
Borrower in writing of such event or condition and, to the extent not
inconsistent with such Lender's internal policies, will use its reasonable
efforts to make, fund or maintain the affected Loans of such Lender, or if
applicable, participate in Letters of Credit as required by Section 2.18,
through another Lending Office of such Lender if as a result thereof the
additional monies which would otherwise be required to be paid or the reduction
of amounts receivable by such Lender hereunder in respect of such Loans, Letters
of Credit or participations therein would be materially reduced, or such
inability to perform would cease to exist, or the increased costs which would
otherwise be required to be paid in respect of such Loans, Letters of Credit or
participations pursuant to Section 2.10(b), this Section 2.13, Section 2.14 or
Section 2.18 would be materially reduced or the taxes or other amounts otherwise
payable under Section 2.10(b), this Section 2.13, Section 2.14 or Section 2.18
would be materially reduced, and if, as determined by such Lender, in its sole
discretion, the making, funding or maintaining of such Loans, Letters of Credit
or participations therein through such other Lending Office would not otherwise
materially adversely affect such Loans, Letters of Credit or participations
therein or such Lender.
(e) If the Borrower shall receive notice from any Lender that
Eurodollar Loans are no longer available from such Lender pursuant to Section
2.14, that amounts are due to such Lender pursuant to subparagraph (c) hereof,
that any of the events designated in subparagraph (d) hereof have occurred, or
that an event has occurred that would cause the Borrower to pay any amount
pursuant to clause (c) of Section 2.15, the Borrower may (but subject in any
such case to the payments required by this Credit Agreement, including, without
limitation Section 2.12 hereof), upon at least five (5) Business Days' prior
written or facsimile notice to such Lender and the Administrative Agent, but not
more than thirty (30) days after receipt of notice from such Lender, identify to
the Administrative Agent a lending institution ("Purchasing Lender") reasonably
acceptable to the Borrower and the Administrative Agent (and that qualifies as
an Eligible Assignee), which will purchase (for an amount, in immediately
available funds, equal to the principal amount of outstanding Loans payable to
such Lender, plus all accrued but unpaid interest and fees payable to such
Lender) the Commitments (if applicable), the amount of outstanding Loans and
41
participations in Letters of Credit (if applicable), from the Lender providing
such notice, and such Lender shall thereupon assign its Commitments (if
applicable), its participations in Letters of Credit (if applicable) and any
Loans owing to such Lender, and any notes held by such Lender to such Purchasing
Lender pursuant to Section 13.3 hereof.
SECTION 2.14 Change in Legality. (a) Notwithstanding anything to
the contrary contained elsewhere in this Credit Agreement, if any change after
the date hereof in Applicable Law, guideline or order, or in the interpretation
thereof by any Governmental Authority charged with the administration thereof,
shall make it unlawful for any Lender to make or maintain any Eurodollar Loan or
to give effect to its obligations as contemplated hereby with respect to a
Eurodollar Loan, then, by written notice to the Borrower and the Administrative
Agent, such Lender may (i) declare that Eurodollar Loans will not thereafter be
made by such Lender hereunder and/or (ii) require that, subject to Section 2.12,
all outstanding Eurodollar Loans made by it be converted to Base Rate Loans,
whereupon all of such Eurodollar Loans shall automatically be converted to Base
Rate Loans, as of the effective date of such notice as provided in paragraph (b)
below. Such Lender's pro rata portion of any subsequent Eurodollar Loan shall,
instead, be a Base Rate Loan unless such declaration is subsequently withdrawn.
(b) A notice to the Borrower by any Lender pursuant to paragraph
(a) above shall be effective for purposes of clause (ii) thereof, if lawful, on
the last day of the current Interest Period for each outstanding Eurodollar
Loan; and in all other cases, on the date of receipt of such notice by the
Borrower.
▇▇▇▇▇▇▇ ▇.▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Withholding. (a) Prior to the Closing
Date, and prior to the effective date set forth in the Assignment and Acceptance
with respect to any Lender becoming a Lender after the date hereof, and from
time to time thereafter if requested by the Borrower or the Administrative Agent
or required because, as a result of a change in law or a change in circumstances
or otherwise, a previously delivered form or statement becomes incomplete or
incorrect in any material respect, each Lender organized under the laws of a
jurisdiction outside the United States shall provide, if applicable, the
Administrative Agent and the Borrower with complete, accurate and duly executed
forms or other statements prescribed by the Internal Revenue Service of the
United States certifying such Lender's exemption from, or entitlement to a
reduced rate of, United States withholding taxes (including backup withholding
taxes) with respect to all payments to be made to such Lender hereunder and
under any other Fundamental Document.
(b) The Borrower or the Administrative Agent shall be entitled to
deduct and withhold any and all present or future taxes or withholdings, and all
liabilities with respect thereto, from payments to a Lender hereunder or under
any other Fundamental Document, if and to the extent that the Borrower or the
Administrative Agent in good faith determines that such deduction or withholding
is required by the law of the United States, including, without limitation, any
applicable treaty of the United States. In the event the Borrower or the
Administrative Agent shall so determine that deduction or withholding of taxes
is required, it shall advise the affected Lender as to the basis of such
determination prior to actually deducting and withholding such taxes. In the
event the Borrower or the Administrative Agent shall so deduct or withhold taxes
from amounts payable hereunder, it (i) shall pay to, or deposit with, the
42
appropriate taxing authority in a timely manner the full amount of taxes it has
deducted or withheld; (ii) shall provide to each Lender from whom taxes were
deducted or withheld, evidence of payment of such taxes to, or the deposit
thereof with, the appropriate taxing authority and a statement setting forth the
amount of taxes deducted or withheld, the applicable rate, and any other
information or documentation reasonably requested by such Lender; and (iii)
shall forward to each such Lender any official tax receipts or other
documentation with respect to the payment or deposit of the deducted or withheld
taxes as may be issued from time to time by the appropriate taxing authority.
Unless the Borrower and the Administrative Agent have received forms or other
documents satisfactory to them indicating that payments hereunder or under any
note evidencing the Loans hereunder are not subject to United States withholding
tax or are subject to such tax at a rate reduced by an applicable tax treaty,
the Borrower or the Administrative Agent may withhold taxes from such payments
at the applicable statutory rate in the case of payments to or for any Lender
organized under the laws of a jurisdiction outside the United States.
(c) Each Lender agrees (i) that as between it and the Borrower or
the Administrative Agent, such Lender shall be the Person to deduct and withhold
taxes, and to the extent required by law, it shall deduct and withhold taxes on
amounts that such Lender may remit to any other Person(s) by reason of any
undisclosed transfer or assignment of an interest in this Credit Agreement to
such other Person(s) pursuant to Section 13.3; and (ii) to indemnify the
Borrower and the Administrative Agent and any officers, directors, partners,
limited liability company members, agents, employees or representatives of the
Borrower or the Administrative Agent against, and to hold them harmless from,
any tax, interest, additions to tax, penalties, reasonable counsel and
accountants' fees, disbursements or payments arising from the assertion by any
appropriate taxing authority of any claim against them relating to a failure to
withhold taxes as required by law with respect to amounts described in clause
(i) of this paragraph (c) or arising from the reliance by the Borrower or the
Administrative Agent on any form or other document furnished by such Lender and
purporting to establish a basis for not withholding, or for withholding at a
reduced rate, taxes with respect to payments hereunder or under any other
Fundamental Document.
(d) Each assignee of a Lender's interest in this Credit Agreement
in conformity with Section 13.3 shall be bound by this Section 2.15, so that
such assignee will have all of the obligations and provide all of the forms and
statements and all indemnities, representations and warranties required to be
given under this Section 2.15.
(e) Notwithstanding the foregoing, in the event that any
withholding taxes or additional withholding taxes shall become payable solely as
a result of any change in any statute, treaty, ruling, determination or
regulation occurring after the Initial Date in respect of any sum payable
hereunder or under any other Fundamental Document to any Lender or any of the
Agents (i) the sum payable by the Borrower shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.15) such Lender or
the applicable Agent (as the case may be) receives an amount equal to the sum it
would have received had no such withholding deductions been made, (ii) the
Borrower shall make such deductions, (iii) the Borrower shall pay the full
43
amount deducted to the relevant taxation authority or other authority in
accordance with Applicable Law and (iv) the Borrower shall forward to such
Lender or the applicable Agent (as the case may be) the official tax receipts or
other documentation pursuant to and as set forth in Section 2.18(b). In
addition, the Borrower shall indemnify each Lender and each of the Agents for
any additional withholding taxes paid by such Lender or such Agent, as the case
may be, or any liability (including penalties and interest) arising therefrom or
with respect thereto, whether or not such additional withholding taxes were
correctly or legally asserted.
(f) In the event that a Lender or an Agent receives a refund of
or credit for taxes withheld or paid pursuant to this Section 2.15, which credit
or refund is identifiable by such Lender or such Agent (as applicable) as being
a result of taxes withheld or paid in connection with sums payable hereunder or
under any other Fundamental Document, such Lender or such Agent (as applicable)
shall promptly notify the Administrative Agent and the Borrower and shall remit
to the Borrower the amount of such refund or credit allocable to payments made
hereunder or under any other Fundamental Document.
(g) Each Lender agrees that after it becomes aware of the
occurrence of an event that would cause the Borrower to pay any amount pursuant
to clause (e) of this Section 2.15, it will use reasonable efforts to notify the
Borrower of such event and, to the extent not inconsistent with such Lender's
internal policies, will use its reasonable efforts to make, fund or maintain the
affected Loans of such Lender through another Lending Office of such Lender if
as a result thereof the additional monies which would otherwise be required to
be paid by reason of Section 2.15(e) in respect of such Loans would be
materially reduced, and if, as determined by such Lender, in its discretion, the
making, funding or maintaining of such Loans through such other Lending Office
would not otherwise materially adversely affect such Loans or such Lender.
(h) For any period with respect to which a Lender has failed to
provide the Borrower with the appropriate form pursuant to Section 2.15(a)
(unless such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Lender shall not be entitled to indemnification under Section 2.15(e);
provided, however, that should a Lender, which is otherwise exempt from or
subject to a reduced rate of withholding tax, become subject to taxes because of
its failure to deliver a form required hereunder, the Borrower shall take such
steps as such Lender shall reasonably request to assist such Lender to recover
such taxes.
SECTION 2.16 Interest Adjustments. If the provisions of this
Credit Agreement or any note evidencing any of the Loans hereunder would at any
time require payment by the Borrower to a Lender of any amount of interest in
excess of the maximum amount then permitted by the law applicable to any Loan,
the applicable interest payments to that Lender in connection with such Loan
shall be reduced to the extent and in such a manner as is necessary in order
that such Lender shall not receive interest in excess of such maximum amount.
If, as a result of the foregoing, a Lender shall receive interest payments
hereunder with respect to a Loan or under a note evidencing such Loan in an
amount less than the amount otherwise provided hereunder, such deficit
(hereinafter called the "Interest Deficit") will, to the fullest extent
permitted by Applicable Law, cumulate and will be carried forward (without
interest) until the Facility Termination Date (except to the extent paid
44
pursuant to the immediately succeeding sentence). Interest otherwise payable to
a Lender hereunder with respect to such Loan and under any note evidencing such
Loan for any subsequent period shall be increased by the maximum amount of the
Interest Deficit that may be so added without causing such Lender to receive
interest in excess of the maximum amount then permitted by Applicable Law.
The amount of any Interest Deficit relating to any Loan and any
note evidencing such Loan shall be treated as a prepayment premium and shall, to
the fullest extent permitted by Applicable Law, be paid in full at the time of
any optional prepayment by the Borrower to the Lenders of all the Loans at that
time outstanding pursuant to Section 2.8 hereof. The amount of any Interest
Deficit relating to a Loan and any note at the time of any complete payment of
the Loans at that time outstanding (other than an optional prepayment thereof
pursuant to Section 2.7 hereof) shall be canceled and not paid.
SECTION 2.17 Manner of Payments. All payments of principal and
interest by the Borrower in respect of any Loans shall be allocated pro rata
among the Lenders holding such Loans in accordance with the then outstanding
principal amounts of such Loans held by them. All payments by the Borrower
hereunder and under any notes evidencing the Loans hereunder shall be made
without offset, counterclaim, recoupment, defense, setoff or other deduction in
Dollars, in Federal or other immediately available funds, at the office of the
Administrative Agent, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
Syndication Agency Services, for credit to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc., no later than
1:00 p.m. (Eastern time), on the date on which such payment shall be due. Any
payment received at such office after such time shall be deemed received on the
following Business Day.
SECTION 2.18 Letters of Credit. (a) (i) Upon the terms and
subject to the conditions hereof and of Applicable Law, the Issuing Bank agrees
to continue the existing Letters of Credit set forth on Schedule 2.18 hereto
(which Letters of Credit shall be deemed issued hereunder for all purposes
hereof) and, upon the request of the Borrower, to issue Letters of Credit (and
to extend Letters of Credit previously issued hereunder) payable in Dollars from
time to time after the Closing Date and prior to the Commitment Termination
Date; provided, however, that (A) the Borrower shall not request, and the
Issuing Bank shall not issue, any Letter of Credit if, after giving effect
thereto, the sum of the then current L/C Exposure, plus the aggregate principal
amount of all Loans then outstanding would exceed the Maximum Credit Amount, (B)
the Borrower shall not request, and the Issuing Bank shall not issue, any Letter
of Credit having an expiration date (x) later than the tenth day prior to the
Commitment Termination Date or (y) more than one year after its date of issuance
or extension and (C) the Borrower shall not request, and the Issuing Bank shall
not issue, any Letter of Credit if, after giving effect thereto, the then
current L/C Exposure with respect to Letters of Credit would exceed $10,000,000.
(ii) Immediately upon the issuance of each Letter of Credit,
each Lender shall be deemed to, and hereby agrees to, have irrevocably
purchased from the Issuing Bank a participation in such Letter of Credit
in accordance with such Lender's Percentage.
45
(iii) Each Letter of Credit may, at the option of the Issuing
Bank, provide that the Issuing Bank may (but shall not be required to)
pay all or any part of the maximum amount which may at any time be
available for drawing thereunder to the beneficiary thereof upon the
occurrence or continuation of an Event of Default and the acceleration
of the maturity of the Loans; provided, that, if payment is not then due
to the beneficiary, the Issuing Bank shall deposit the funds in question
in a segregated account with the Issuing Bank to secure payment to the
beneficiary and any funds so deposited shall be paid to the beneficiary
of the Letter of Credit if conditions to such payment are satisfied or
returned to the Issuing Bank for distribution to the Lenders (or, if all
Obligations shall have been indefeasibly paid in full in cash, to the
Borrower) if no payment to the beneficiary has been made and the final
date available for drawings under the Letter of Credit has passed. Each
payment or deposit of funds by the Issuing Bank as provided in this
paragraph shall be treated for all purposes of this Credit Agreement as
a drawing duly honored by such Issuing Bank under the related Letter of
Credit.
(b) Whenever the Borrower desires the issuance of a Letter of
Credit, it shall deliver to the Administrative Agent and the Issuing Bank a
written notice no later than 1:00 p.m. (Eastern time) at least two (2) Business
Days prior to the proposed date of issuance (or such lesser time as is
acceptable to the Issuing Bank). Such notice shall specify (i) the proposed date
of issuance (which shall be a Business Day), (ii) the face amount of the Letter
of Credit, (iii) the expiration date of the Letter of Credit and (iv) the name
and address of the beneficiary. Such notice shall be accompanied by a brief
description of the underlying transaction and upon request of the Issuing Bank
or the Administrative Agent, the Borrower shall provide additional details
regarding the underlying transaction. Concurrently with the giving of written
notice of a request for the issuance of a Letter of Credit, the Borrower shall
specify a precise description of the documents and the verbatim text of any
certificate to be presented by the beneficiary of such Letter of Credit which,
if presented by such beneficiary prior to the expiration date of the Letter of
Credit, would require the Issuing Bank to make payment under the Letter of
Credit; provided, however, that the Issuing Bank, in its reasonable discretion,
may require customary changes in any such documents and certificates to be
presented by the beneficiary. Any Letter of Credit shall be issued solely for
one of the following purposes: (1) to provide credit support for indemnity
obligations of a Credit Party in connection with the sale or lease of an asset
permitted hereunder (provided, that the applicable indemnity obligation is not
prohibited by the terms of this Credit Agreement), (2) in connection with a
Permitted Lien or (3) for such other purpose as has been approved by the
Administrative Agent and the Issuing Bank. Upon issuance of each Letter of
Credit, the Issuing Bank shall notify the Administrative Agent of the issuance
of such Letter of Credit. Promptly after receipt of such notice, the
Administrative Agent shall notify each Lender of the issuance and the amount of
such Lender's respective participation in the applicable Letter of Credit.
(c) Each Letter of Credit shall be subject to (i) the Uniform
Customs and Practice for Documentary Credits, International Chamber of Commerce
Publication No. 500, or any successor publication, as adopted or amended from
time to time (the "Uniform Customs") and (ii) as to matters not addressed by the
Uniform Customs, the law of the State of New York (or, if the Issuing Bank so
elects, the law of the jurisdiction in which the office from which it issues its
46
Letters of Credit is located). The Issuing Bank shall be entitled to honor any
drafts and accept any documents presented to it by the beneficiary of such
Letter of Credit in accordance with the terms of such Letter of Credit and
believed by the Issuing Bank in good faith to be genuine. The Issuing Bank shall
not have any duty to inquire as to the accuracy or authenticity of any draft or
other drawing documents which may be presented to it, but shall be responsible
only to determine in accordance with customary commercial practices that the
documents which are required to be presented before payment or acceptance of a
draft under any Letter of Credit have been delivered and that they comply on
their face with the requirements of such Letter of Credit.
(d) If the Issuing Bank shall make payment on any draft presented
under a Letter of Credit (regardless of whether a Default, Event of Default or
acceleration has occurred), the Issuing Bank shall give notice of such payment
to the Administrative Agent and the Lenders, and each Lender hereby authorizes
and requests the Issuing Bank to advance for its account, pursuant to the terms
hereof, its share of such payment based upon its participation in the Letter of
Credit and agrees promptly to reimburse the Issuing Bank in immediately
available funds in Dollars for the amount so advanced on its behalf by the
Issuing Bank. If any such reimbursement is not made by any Lender in immediately
available funds on the same day on which the Issuing Bank shall have made
payment on any such draft, such Lender shall pay interest thereon to the Issuing
Bank at a rate per annum equal to the Issuing Bank's cost of obtaining overnight
funds in the Federal Funds market for the first three (3) days following the
time when such Lender fails to make the required reimbursement, and thereafter
at a rate per annum equal to the Base Rate plus the Applicable Interest Margin
for Base Rate Loans.
(e) The Borrower is absolutely, unconditionally and irrevocably
obligated to reimburse all amounts drawn under each Letter of Credit. If any
draft is presented under a Letter of Credit, the payment of which is required to
be made at any time on or before the Commitment Termination Date, then payment
by the Issuing Bank of such draft shall constitute a Loan (which is a Base Rate
Loan) hereunder and interest shall accrue from the date the Issuing Bank makes
payment on such draft under such Letter of Credit. If any draft is presented
under a Letter of Credit, the payment of which is required to be made after the
Commitment Termination Date or at the time when an Event of Default or Default
shall have occurred and then be continuing, then the Borrower shall immediately
pay to the Issuing Bank, in immediately available funds, the full amount of such
draft together with interest thereon at a rate per annum of 2% in excess of the
rate then in effect for Loans which are Base Rate Loans from the date on which
the Issuing Bank makes such payment of such draft until the date it receives
full reimbursement for such payment from the Borrower. The Borrower further
agrees that the Issuing Bank may reimburse itself for such drawing from the
balance in any other account of the Borrower maintained with the Issuing Bank.
(f) (i) The Borrower agrees to pay the following amounts to the
Issuing Bank with respect to Letters of Credit issued by it hereunder:
(A) with respect to the issuance, amendment, transfer or
other transaction related to a Letter of Credit and each drawing
made thereunder, documentary and processing charges in
accordance with the Issuing Bank's standard
47
schedule for such charges in effect at the time of such
issuance, amendment, transfer, drawing or other transaction, as
the case may be; and
(B) a fronting fee payable directly to the Issuing Bank,
for its sole account, for the period from and including the
Closing Date to, but excluding, the Commitment Termination Date
computed at a rate equal to one-quarter of one percent (0.25%)
per annum of the daily average L/C Exposure (calculated in the
same manner as interest on a Eurodollar Loan), such fee to be
due and payable in arrears on and through the last Business Day
of each March, June, September and December in each year
(commencing on the last Business Day of December 2002) prior to
the Commitment Termination Date or the expiration of the last
outstanding Letter of Credit (whichever is later) and on the
later of the Commitment Termination Date and the expiration of
the last outstanding Letter of Credit.
(ii) The Borrower agrees to pay to the Administrative Agent for
distribution to each Lender in respect of its L/C Exposure, such
Lender's pro rata share (based on its Commitment) of a commission equal
to (A) a per annum percentage rate equal to the Applicable Interest
Margin for Loans which are Eurodollar Loans multiplied by (B) the
average daily amount of the L/C Exposure. Such commission shall be
calculated in the same manner as interest on a Eurodollar Loan and shall
be due and payable in arrears on and through the last Business Day of
each March, June, September and December in each year (commencing on the
last Business Day of December 2002) prior to the Commitment Termination
Date or the expiration of the last outstanding Letter of Credit
(whichever is later) and on the later of the Commitment Termination Date
and the expiration of the last outstanding Letter of Credit. From the
occurrence and during the continuance, of an Event of Default, such
commission shall be increased to an amount equal to 2% plus the
Applicable Interest Margin for Loans which are Eurodollar Loans
multiplied by the daily average amount of the L/C Exposure; and
(iii) Promptly upon receipt by the Issuing Bank or the
Administrative Agent of any amount described in clause (ii) of this
Section 2.18(f), or any amount described in Section 2.18(e) previously
reimbursed to the Issuing Bank by the Lenders, the Issuing Bank or the
Administrative Agent (as applicable) shall distribute to each Lender its
pro rata share of such amount based on its participation in, or amount
paid by such Lender with respect to, the applicable Letter(s) of Credit.
Amounts payable under clauses (i)(A) and (i)(B) of this Section 2.18(f)
shall be paid directly to the Issuing Bank and shall be for its
exclusive use.
(g) If by reason of (i) any change in Applicable Law after the
Initial Date, or in the interpretation or administration thereof (including,
without limitation, any request, guideline or policy not having the force of
law) by any Governmental Authority charged with the administration or
interpretation thereof, or (ii) compliance by the Issuing Bank or any Lender
with any direction, request or requirement (whether or not having the force of
law) issued after the Initial Date by any Governmental Authority or monetary
authority, including, without limitation, any change whether or not proposed or
48
published prior to the Initial Date and any modifications to Regulation D
occurring after the Initial Date:
(A) the Issuing Bank or any Lender shall be subject to
any tax, levy, impost, duty, fee, charge, deduction or
withholding of any nature with respect to any Letter of Credit
(other than withholding tax imposed by the United States of
America or any other tax, levy, impost, duty, fee, charge,
deduction or withholding (1) that is measured with respect to
the overall net income of the Issuing Bank or such Lender or of
a Lending Office of the Issuing Bank or such Lender, and that is
imposed by the United States of America, or by the jurisdiction
in which the Issuing Bank or such Lender is incorporated, or in
which such Lending Office is located, managed or controlled or
in which the Issuing Bank or such Lender has its principal
office or a presence which is not otherwise connected with, or
required by, this transaction (or any political subdivision or
taxing authority thereof or therein) or (2) that is imposed
solely by reason of the Issuing Bank or such Lender failing to
make a declaration of, or otherwise to establish, nonresidence
or to make any other claim for exemption, or otherwise to comply
with any certification, identification, information,
documentation or reporting requirements prescribed under the
laws of the relevant jurisdiction, in those cases where the
Issuing Bank or such Lender may properly make the declaration or
claim or so establish nonresidence or otherwise comply), or to
any variation thereof or to any penalty with respect to the
maintenance or fulfillment of its obligations under this Section
2.18, whether directly or by such being imposed on or suffered
by the Issuing Bank or any Lender;
(B) the basis of taxation of any fee or amount payable
hereunder with respect to any Letter of Credit or any
participation therein shall be changed;
(C) any reserve, deposit or similar requirement is or
shall be applicable, imposed or modified in respect of any
Letter of Credit issued by the Issuing Bank or participations
therein purchased by any Lender; or
(D) there shall be imposed on the Issuing Bank or any
Lender any other condition regarding this Section 2.18, any
Letter of Credit or any participation therein;
and the result of the foregoing is to directly or indirectly increase from the
conditions that exist on the Initial Date the cost to the Issuing Bank or any
Lender of issuing, making or maintaining any Letter of Credit or of purchasing
or maintaining any participation therein, or to reduce the amount receivable in
respect thereof by the Issuing Bank or any Lender, then and in any such case the
Issuing Bank or such Lender may, at any time, notify the Borrower, and the
Borrower shall pay on demand such amounts as the Issuing Bank or such Lender may
specify to be necessary to compensate the Issuing Bank or such Lender for such
additional cost or reduced receipt. Sections 2.13(b), (c) and (d) shall in all
instances apply to the Issuing Bank and any Lender with respect to the Letters
of Credit issued hereunder. The determination by the Issuing Bank or any Lender,
as the case may be, of any amount due pursuant to this Section 2.18 as set forth
49
in a certificate setting forth the calculation thereof in reasonable detail
shall, in the absence of manifest error, be final, conclusive and binding on all
of the parties hereto.
(h) If at any time when an Event of Default shall have occurred
and be continuing, any Letters of Credit shall remain outstanding, then the
Issuing Bank may, and if directed by the Required Lenders shall, require the
Borrower to deliver to the Administrative Agent cash or Cash Equivalents in an
amount equal to 105% of the amount of the L/C Exposure or to furnish other
security acceptable to the Issuing Bank and the Required Lenders. Any amounts so
delivered pursuant to the preceding sentence shall be applied to reimburse the
Issuing Bank for the amount of any drawings honored under Letters of Credit and
any costs associated with the Letters of Credit; provided, however, that if
prior to the Commitment Termination Date, (i) no Default or Event of Default is
then continuing, then the Administrative Agent shall return all of such
collateral relating to such deposit to the Borrower if requested by it or (ii)
Letters of Credit shall expire or be returned by the beneficiary so that the
amount of the cash or Cash Equivalents delivered to the Administrative Agent
hereunder shall exceed 105% of the then current L/C Exposure, then such excess
shall first be applied to pay any Obligations owing to the Lenders under this
Credit Agreement and the remainder shall be returned to the Borrower.
(i) Notwithstanding the termination of the Commitments and the
payment of the Loans, the obligations of the Borrower under this Section 2.18
shall remain in full force and effect until the Administrative Agent, the
Issuing Bank and the Lenders shall have been irrevocably released from their
obligations with regard to any and all Letters of Credit.
(j) The obligations of the Borrower to reimburse the Issuing Bank
and the Lenders for drawings made under any Letter of Credit shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Credit Agreement under all circumstances, including, without
limitation: (i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, setoff, defense or other right which the
Borrower may have at any time against a beneficiary of any Letter of Credit or
against the Issuing Bank or any of the Lenders, whether in connection with this
Credit Agreement, the transactions contemplated herein or any unrelated
transaction; (iii) payment by the Issuing Bank against any draft, demand,
certificate or other document presented under any Letter of Credit which proves
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect; (iv) payment by the
Issuing Bank of any Letter of Credit against presentation of a demand, draft or
certificate or other document which does not comply with the terms of such
Letter of Credit (including, without limitation, payment by the Issuing Bank in
accordance with its usual practices and procedures, subsequent to the expiry
date of a Letter of Credit, as long as the Issuing Bank has obtained the consent
of the Borrower thereto and has not been notified in writing by the
Administrative Agent or a Lender of the occurrence of the Commitment Termination
Date); (v) any other circumstance or happening whatsoever, which is similar to
any of the foregoing; or (vi) the fact that any Event of Default shall have
occurred and be continuing (it being understood that any such payment by the
Borrower shall be without prejudice to, and shall not constitute a waiver of,
any rights the Borrower might have or might acquire against any party as a
result of the payment by the Issuing Bank of any draft or the reimbursement by
the Borrower thereof).
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3. REPRESENTATIONS AND WARRANTIES OF CREDIT PARTIES
In order to induce the Agents, the Issuing Bank and the Lenders
to enter into this Credit Agreement and to make Loans and to issue or purchase
participations in the Letters of Credit provided for herein, the Credit Parties,
jointly and severally, make the following representations and warranties to, and
agreements with, the Agents, the Issuing Bank and the Lenders, all of which
shall survive the execution and delivery of this Credit Agreement, the issuance
of any notes evidencing any of the Loans hereunder and the making of the Loans
and the issuance of the Letters of Credit:
SECTION 3.1 Existence and Power. (a) Each Credit Party is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization and is qualified to do business
and is in good standing in all jurisdictions where either (i) the nature of its
properties or business so requires or (ii) the failure to be in good standing
could reasonably be expected to have a Material Adverse Effect. Schedule 3.1(a)
hereto sets forth a list of all jurisdictions in which each Credit Party is
incorporated or organized and is so qualified.
(b) Each of the Credit Parties has the partnership, company or
corporate, as the case may be, power and authority (i) to own its respective
properties and carry on its respective business as now being, or as now intended
to be, conducted, (ii) to execute, deliver and perform, as applicable, its
obligations under the Fundamental Documents, the Note Agreement, the A-Advanced
Guaranty and the Subordinated Security Agreement, and any other documents
contemplated hereby or thereby to which it is or will be a party and (iii) to
grant to the Collateral Agent, for the benefit of the Secured Parties, a
security interest in the Collateral and the Real Property Assets as contemplated
by this Credit Agreement, the other Fundamental Documents to which it is or will
be a party, the Note Agreement (with respect to the Borrower), the A-Advanced
Guaranty (with respect to the Borrower) and the Subordinated Security Agreement;
and in the case of the Pledgors, to pledge to the Collateral Agent for the
benefit of the Secured Parties, the Pledged Collateral as contemplated by
Article 10 hereof; and in the case of the Borrower, to execute, deliver and
perform its obligations under this Credit Agreement and any notes evidencing any
of the Loans hereunder and to borrow hereunder; and in the case of the
Guarantors, to guaranty the Obligations as contemplated by Article 9 hereof.
SECTION 3.2 Authority and No Violation. The execution, delivery
and performance of this Credit Agreement, the other Fundamental Documents to
which it is a party, the Note Agreement (solely with respect to the Borrower),
the A-Advanced Guaranty (solely with respect to the Borrower) and the
Subordinated Security Agreement by each Credit Party, the grant to the
Collateral Agent for the benefit of the Secured Parties of the security interest
in the Collateral and the Real Property Assets as contemplated by this Credit
Agreement, the other Fundamental Documents, the Note Agreement, the A-Advanced
Guaranty and the Subordinated Security Agreement, in each case to which it is or
will be a party, by each Credit Party, and the pledge to the Collateral Agent
for the benefit of the Secured Parties of the Pledged Collateral as contemplated
by Article 10 hereof, by each Pledgor and, in the case of the Borrower, the
Borrowings hereunder and the execution, delivery and performance of any notes
evidencing any of the Loans hereunder and, in the case of each Guarantor, the
guaranty of the Obligations as contemplated in Article 9 hereof, (i) have been
51
duly authorized by all necessary company, partnership, member or corporate (as
applicable) action on the part of each such Credit Party, (ii) will not
constitute a violation of any provision of Applicable Law or any order of any
Governmental Authority applicable to such Credit Party or any of its respective
properties or assets, (iii) will not violate any provision of the Certificate of
Incorporation, By-Laws, partnership agreement, limited liability company
agreement, articles of organization or any other organizational document of any
Credit Party or any Subsidiary of a Credit Party, or any provision of any,
material indenture, agreement, bond, note, mortgage, deed of trust, or other
similar instrument to which such Credit Party is a party or by which such Credit
Party or any of its respective properties or assets are bound or to which such
Credit Party is subject, (iv) will not be in conflict with, result in a breach
of, or constitute (with due notice or lapse of time or both) a default under, or
create any right to terminate, any indenture, agreement, bond, note, mortgage,
deed of trust, or other instrument to which a Credit Party is party or by which
a Credit Party is bound (other than with respect to the agreement set forth in
Section 6.4(i) hereof) and (v) will not result in the creation or imposition of
(or the obligation to create or impose) any Lien, charge or encumbrance of any
nature whatsoever upon any of the properties or assets of any of the Credit
Parties or any Subsidiary of a Credit Party other than pursuant to this Credit
Agreement, the other Fundamental Documents, the Note Agreement, the A-Advanced
Guaranty and the Subordinated Security Agreement.
SECTION 3.3 Governmental Approval. (a) All authorizations,
approvals, orders, consents, licenses, registrations or filings from or with any
Governmental Authority (other than UCC financing statements and the Mortgages,
all of which will be delivered to the Collateral Agent in accordance with the
terms of this Credit Agreement, in form suitable for recording or filing with
the appropriate filing office) required for the execution, delivery and
performance by any Credit Party) of this Credit Agreement and the other
Fundamental Documents to which it is a party, and the execution and delivery by
the Borrower of any notes evidencing any of the Loans hereunder, have been duly
obtained or made, and are in full force and effect, and if any further
authorizations, approvals, orders, consents, licenses, registrations or filings
should hereafter become necessary, the Credit Parties shall obtain or make all
such authorizations, approvals, orders, consents, licenses, registrations or
filings.
(b) Each Credit Party and each Subsidiary of a Credit Party has
obtained and holds in full force and effect all licenses, authorizations,
consents, franchises, permits, certificates (including, without limitation,
certificates of need) accreditations, easements, rights of way and other
approvals necessary to own its respective property and assets and to carry on
its respective business as now being, or as now intended to be, conducted, other
than those the absence of which is not reasonably likely to have a Material
Adverse Effect.
SECTION 3.4 Binding Agreements. Each Credit Party has duly
executed and delivered this Credit Agreement, each other Fundamental Document to
which it is a party and the Subordinated Security Agreement. The Borrower has
duly executed and delivered the Note Agreement and the A-Advanced Guaranty. Each
of this Credit Agreement, the other Fundamental Documents, the Note Agreement,
the A-Advanced Guaranty and the Subordinated Security Agreement constitutes the
legal, valid and binding obligation of each Credit Party that is a party
52
thereto, enforceable against such Credit Party in accordance with its respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and to general
principles of equity, whether such enforceability is considered in a proceeding
at law or in equity.
SECTION 3.5 No Material Adverse Effect. (a) Since June 30, 2002,
there has been no material adverse change with respect to the business,
operations, performance, assets, properties, condition (financial or otherwise)
or prospects of the Borrower or the Borrower and the Credit Parties taken as a
whole, other than those changes which have occurred in connection with the
administration by the Bankruptcy Court of the Cases.
(b) No Credit Party has entered or is entering into the
arrangements contemplated hereby and by the other Fundamental Documents, the
Note Agreement, the A-Advanced Guaranty or the Subordinated Security Agreement,
or intends to make any transfer or incur any obligations hereunder or
thereunder, with actual intent to hinder, delay or defraud either present or
future creditors. On and as of the Closing Date after giving effect to the Plan,
on a Pro Forma Basis after giving effect to all Indebtedness (including the
Loans and the Notes) expected to be in existence on the Closing Date: (i) each
Credit Party expects the cash available to such Credit Party, after taking into
account all other anticipated uses of the cash of such Credit Party (including
the payments on or in respect of debt referred to in clause (iii) of this
Section 3.5(b)), will be sufficient to satisfy all final judgments for money
damages which have been docketed against such Credit Party or which may be
rendered against such Credit Party in any action in which such Credit Party is a
defendant as of the date hereof (taking into account the reasonably anticipated
maximum amount of any such judgment and the earliest time at which such judgment
might be entered); (ii) the sum of the present fair saleable value of the assets
of each Credit Party will exceed the probable liability of such Credit Party on
its debts (including its Guaranties); (iii) no Credit Party will have incurred
or intends to, or believes that it will, incur debts beyond its ability to pay
such debts as such debts mature (taking into account the timing and amounts of
cash to be received by such Credit Party from any source, and of amounts to be
payable on or in respect of debts of such Credit Party and the amounts referred
to in clause (i)); and (iv) each Credit Party believes it will have sufficient
capital with which to conduct its present and proposed business and the property
of such Credit Party does not constitute unreasonably small capital with which
to conduct its present or proposed business. For purposes of this Section
3.5(b), "debt" means any liability or a claim, and "claim" means any (y) right
to payment whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured, or (z) right to an equitable remedy for
breach of performance if such breach gives rise to a payment, whether or not
such right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured.
SECTION 3.6 Financial Information. (i) The audited, consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries at September 30,
2001 and (ii) the unaudited, consolidated balance sheets of the Borrower and its
Consolidated Subsidiaries at June 30, 2002, together in each case with the
related statements of income, stockholders' equity and cash flows and the
related notes and supplemental information, in the forms which have previously
53
been delivered to the Lenders, have been prepared in accordance with GAAP
consistently applied, except as otherwise indicated in the notes to such
financial statements and subject in the case of unaudited statements, to changes
resulting from year-end and audit adjustments. All of such financial statements
fairly present, in accordance with GAAP, the consolidated financial position and
the results of operations, as the case may be, of the Borrower and its
Consolidated Subsidiaries, at the dates or for the periods indicated.
SECTION 3.7 Credit Parties and their Subsidiaries. (a) Annexed
hereto as Schedule 3.7 is a correct and complete list as of the Closing Date, of
each Credit Party and each Subsidiary of a Credit Party showing, as to each, (i)
its exact legal name, (ii) the jurisdiction in which it was incorporated or
otherwise organized, (iii) its type of organization, (iv) in the case of a
Credit Party, its taxpayer identification number and organizational
identification number if it has one, (v) in the case of a Credit Party which is
a corporation, its authorized capitalization, the number of shares of its
capital stock outstanding and the ownership of such capital stock, (vi) in the
case of a Credit Party which is a limited partnership, the general partners and
limited partners of such Credit Party and the ownership of its partnership
interests, (vii) in the case of a Credit Party which is a limited liability
company, the members of such Credit Party and the ownership of its limited
liability company interests and (viii) in the case of each Credit Party, the
location of its chief executive office and the location where it keeps the
records concerning the Collateral or any Real Property Asset or any item
included in the Collateral.
(b) As of the Closing Date, no Credit Party owns any voting stock
or other beneficial interest, either directly or indirectly, in any Person other
than another Credit Party or as set forth on Schedule 3.7 hereto.
(c) As of the Closing Date, no Credit Party is a limited or
general partner in any joint venture or partnership, except as set forth on
Schedule 3.7 hereto.
SECTION 3.8 Patents, Trademarks, Copyrights and Other Rights. (a)
The Credit Parties and their Subsidiaries possess all patents, patent rights and
licenses, trademarks, service marks, tradenames, trademark rights and licenses,
copyrights, copyright rights and licenses and any other similar rights, free
from burdensome restrictions, which are material to the conduct of their
respective businesses (collectively the "Proprietary Rights") and have duly
recorded their interest in the United States Patent and Trademark Office or the
United States Copyright Office as applicable. Schedule 3.8(a) lists all
registered Proprietary Rights, and all Proprietary Rights as to which an
application for registration has been made, owned and used or held for use by
any Credit Party or any Subsidiary of a Credit Party, specifying as to each, as
applicable: (i) the nature of such Proprietary Right; (ii) the Credit Party or
Subsidiary thereof which owns such Proprietary Right; (iii) the jurisdictions or
government offices by or in which such Proprietary Right has been issued or
registered (or, if applicable, in which an application for such issuance or
registration has been filed), including the respective registration or
application numbers and (iv) all licenses, sublicenses and other agreements to
which a Credit Party or Subsidiary thereof is a party and pursuant to which any
Person is authorized to use any Proprietary Right including, as to licenses to a
Credit Party or Subsidiary thereof, the identity of the licensor, and as to
licenses granted by a Credit Party or Subsidiary thereof, the identity of the
licensee. To the best of the Credit Parties' knowledge, a Credit Party or
54
Subsidiary thereof is either (1) the sole and exclusive owner (excluding
licenses granted by a Credit Party or Subsidiary thereof) of all right, title
and interest in and to (free and clear of any Lien) the Proprietary Rights
described in Schedule 3.8(a) hereto and has sole and exclusive rights to the use
thereof or the material covered thereby in connection with the services or
products in respect of which they are being used, or (2) the licensee of (free
and clear of any Lien) the Proprietary Rights described in Schedule 3.8(a)
hereto and has the rights to the use thereof or material covered thereby (other
than, in the cases of each of clauses (1) and (2) above, Proprietary Rights for
which an application is pending) in connection with the services or products in
respect of which they are being used.
(b) Except as set forth on Schedule 3.8(b) hereto, (i) there is
no claim, suit, action or proceeding pending, or to the Credit Parties'
knowledge, threatened, against a Credit Party or Subsidiary thereof that
involves a claim of infringement of any Proprietary Right and (ii) no Credit
Party has any knowledge of any existing infringement by any other Person of any
of the Proprietary Rights which in either case would have a Material Adverse
Effect.
SECTION 3.9 Fictitious Names. Except as disclosed on Schedule 3.9
hereto, none of the Credit Parties has done business, is doing business or
intends to do business other than under its full corporate, partnership or
company name (as applicable), including, without limitation, under any trade
name or other doing business name.
SECTION 3.10 Title to Properties. (a) Except (i) as set forth on
Schedule 3.10(a) hereto or (ii) where the failure to do so would not have a
Material Adverse Effect, the Credit Parties and their Subsidiaries have good
title to (and with respect to Real Property Assets, good and marketable title
to, or valid leasehold interests in) each of the properties and assets reflected
on the financial statements referred to in Section 3.6 hereof, including,
without limitation, the Real Property Assets listed on Schedules 3.24(a) and
3.24(b) hereto (other than such properties or assets disposed of in the ordinary
course of business since the date of such financial statements or as permitted
hereunder) and all such properties and assets are free and clear of Liens,
except Permitted Liens.
(b) Each of the Credit Parties has complied in all material
respects with all leases to which it is a party, and is aware of no defaults
under any such lease or any conditions which with the passage of time or
delivery of notice would constitute a default thereunder and all such leases are
in full force and effect. Each of the Credit Parties which is a lessee under any
lease, enjoys peaceful and undisturbed possession of the Real Property Assets
leased pursuant to such lease, subject to Permitted Liens.
(c) No Credit Party has received any notice of, nor has any
knowledge of, any pending or contemplated condemnation proceeding affecting any
Real Property Asset or any sale or disposition thereof in lieu of condemnation,
except as otherwise set forth on Schedule 3.10(c) hereto.
(d) No Credit Party is obligated under any right of first
refusal, option or other contractual right to sell, assign or otherwise dispose
55
of any Real Property Asset or any interest therein except for such rights of
first refusal, options or other contractual rights described on Schedule 3.10(d)
hereto.
SECTION 3.11 Special Representations Relating to Eligible Account
Receivables. With respect to each Eligible Account Receivable, (i) it is genuine
and in all respects what it purports to be, and it is not evidenced by a
judgment; (ii) it arose out of a completed rendition of services by a Credit
Party in the ordinary course of its business and in accordance with the terms
and conditions of all contracts or other documents relating thereto and forming
a part of the contract between such Credit Party and the Account Debtor; (iii)
to the knowledge of the applicable Credit Party, the Account Debtor thereunder
had the capacity to contract at the time any contract or other document giving
rise to the Account was executed, and is solvent; (iv) to the knowledge of the
applicable Credit Party, there are no proceedings or actions which are
threatened or pending against the Account Debtor thereunder which could
reasonably be expected to result in any material adverse change in such account
debtor's financial condition or the collectibility of such Eligible Account
Receivable; (v) the Eligible Account Receivable is for a liquidated amount
maturing as stated in the Credit Parties' records which are available to the
Administrative Agent and the Collateral Agent; (vi) the Eligible Account
Receivable is not subject to any offset, Lien, deduction, defense, dispute,
counterclaim or any other adverse condition except for discounts and allowances
made in the ordinary course of business and consistent with the Credit and
Collection Policy, and each Eligible Account Receivable is absolutely owing to
such Credit Party and was not contingent in any respect or for any reason, and
there are not facts, events or occurrences which in any way impair the validity
or enforceability thereof or tend to reduce the amount payable thereunder from
the face amount of the invoice and statements with respect thereto; and (vii)
the Credit Party has made no agreement with any Account Debtor for any deduction
therefrom, except discounts or allowances which are granted by such Credit Party
in the ordinary course of its business for the prompt payment and which are
reflected in the calculation of the net amount of the invoice related thereto.
SECTION 3.12 Litigation; Judgments. (a) Except as set forth on
Schedule 3.12(a) hereto, there are no actions, suits or other proceedings at law
or in equity by or before any arbitrator or arbitration panel, or any
Governmental Authority (including, but not limited to, matters relating to
environmental liability) or any investigation by any Governmental Authority of
the affairs of, or to the best of each Credit Party's knowledge, threatened
action, suit or other proceeding against or affecting, any Credit Party, any
Subsidiary of a Credit Party or of any of their respective properties or rights
which either (A) if adversely determined, could reasonably be expected to have a
Material Adverse Effect, or (B) relate to this Credit Agreement, any Fundamental
Document or any of the transactions contemplated hereby or thereby or the Loans
hereunder. No Credit Party and no Subsidiary of a Credit Party is in default
with respect to any order, writ, injunction, decree, rule or regulation of any
Governmental Authority binding upon such Person, which default could reasonably
be expected to have a Material Adverse Effect.
(b) There are no unpaid final, nonappealable judgments or decrees
in an aggregate amount of $500,000 or more entered by a court or courts of
competent jurisdiction against any Credit Party or any Subsidiary of a Credit
Party (other than any judgment as to which, and only to the extent, a reputable
insurance company has acknowledged coverage of such claim in writing).
56
SECTION 3.13 Federal Reserve Regulations. No Credit Party nor any
Subsidiary of a Credit Party is engaged principally or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying any Margin Stock. No part of the proceeds of the Loans will be used,
directly or indirectly, whether immediately, incidentally or ultimately (i) to
purchase or carry any Margin Stock or to extend credit to others for the purpose
of purchasing or carrying any Margin Stock, or (ii) for any other purpose, in
each case, violative of or inconsistent with any of the provisions of any
regulation of the Board, including, without limitation, Regulations T, U and X
thereto.
SECTION 3.14 Investment Company Act. No Credit Party nor any
Subsidiary of a Credit Party is, or will during the term of this Credit
Agreement be, (i) an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended, or (ii) subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act or any foreign, federal or local
statute or any other Applicable Law of the United States of America or any other
jurisdiction, in each case limiting its ability to incur indebtedness for money
borrowed as contemplated hereby or by any other Fundamental Document.
SECTION 3.15 Taxes. Except as set forth on Schedule 3.15 hereto,
(i) each Credit Party has filed or caused to be filed all United States federal
tax returns, state income tax returns and other material tax returns which are
required to be filed with any Governmental Authority after giving effect to
applicable extensions, and has paid or has caused to be paid all taxes as shown
on said returns or on any assessment received by them, to the extent that such
taxes have become due, except as permitted by Section 5.8 hereof and (ii) each
Subsidiary of a Credit Party which is not itself a Credit Party has filed or
caused to be filed all United States federal tax returns, state income tax
returns and other material tax returns which are required to be filed with any
Governmental Authority after giving effect to applicable extensions, and has
paid or has caused to be paid all taxes as shown on said returns or on any
assessment received by them, to the extent that such taxes have become due,
except as permitted by Section 5.8 hereof or to the extent that the failure of
such Subsidiary to do so would not have a Material Adverse Effect hereunder. No
Credit Party knows of any material additional assessments or any basis therefor.
In the reasonable, good faith opinion of the Credit Parties, the charges,
accruals and reserves on the books of the Credit Parties and their Subsidiaries
in respect of taxes or other governmental charges are adequate.
SECTION 3.16 Compliance with ERISA. (a) Each Plan has been
maintained and operated in all material respects in accordance with all
Applicable Laws, including ERISA and the Code except to the extent that any
failure thereof could not reasonably be expected to result in a material
liability. Each Plan intended to qualify under Section 401(a) of the Code so
qualifies except to the extent that any failure to so qualify could not
reasonably be expected to result in a material liability. No Reportable Event
has occurred since the effective date of the Plan of Reorganization. No Plan has
an "accumulated funding deficiency," within the meaning of Section 412 of the
Code or Section 302 of ERISA, or has applied for or received a waiver of the
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minimum funding standards or an extension of any amortization period, within the
meaning of Section 412 of the Code or Section 303 or 304 of ERISA. No material
liability has been, and no circumstances exist pursuant to which any such
material liability could reasonably likely be, imposed upon any Credit Party or
ERISA Affiliate (i) under Sections 4971 through 4980B of the Code, Section 409,
502(i), 502(l) or 515 of ERISA, or under Title IV of ERISA with respect to any
Plan or Multiemployer Plan, or with respect to any plan heretofore maintained by
any Credit Party or ERISA Affiliate, or any entity that heretofore was an ERISA
Affiliate, or (ii) for the failure to fulfill any obligation to contribute to
any Multiemployer Plan. Neither any Credit Party nor any ERISA Affiliate has
received any notification that any Multiemployer Plan is in reorganization or
has been terminated within the meaning of Title IV of ERISA, no Multiemployer
Plan is reasonably expected to be in reorganization or to be terminated and,
using actuarial assumptions and computation methods consistent with Part 1 of
Subtitle E of Title IV of ERISA, the aggregate liabilities of the Credit Parties
and their ERISA Affiliates to all Multiemployer Plans in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of each
such Plan then ended would not exceed $1,000,000.
(b) Assuming none of the Lenders is using assets of any employee
benefit plan subject to Title I of ERISA or any "plan" (within the meaning of
Section 4975(e) of the Code) maintained by the Borrower or any of its ERISA
Affiliates to make the Loans, the execution, delivery and performance of the
Fundamental Documents, the Note Agreement, the A-Advanced Guaranty and the
Subordinated Security Agreement, and the consummation of the transactions
contemplated hereby and thereby will not involve any "prohibited transaction"
within the meaning of Section 406 of ERISA or Section 4975 of the Code.
SECTION 3.17 Agreements. (a) No Credit Party nor any Subsidiary
of a Credit Party is in default in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in any agreement or
instrument to which it is a party (including, without limitation, the Note
Agreement) or by which it or any of its property or assets is bound in any
respect which default could reasonably be expected to result in a Material
Adverse Effect.
(b) Schedule 3.17(b) hereto is a true and complete listing as of
the Closing Date of (i) all material credit agreements, indentures, and other
agreements related to any Indebtedness of any Credit Party, other than the
Fundamental Documents, the Note Agreement, the A-Advanced Guaranty and the
Subordinated Security Agreement, (ii) all material joint venture agreements to
which any Credit Party is a party, (iii) all material leases with respect to any
Real Property Asset, (iv) all material agreements or other arrangements pursuant
to which a Credit Party has granted a Lien to any Person and, (v) all other
contractual arrangements entered into by a Credit Party or by which any Credit
Party or any of its property or assets is bound which arrangements are material
to any Credit Party, including but not limited to, Guaranties.
SECTION 3.18 Security Interest. (a) This Credit Agreement and the
other Fundamental Documents (other than the Mortgages), when executed and
delivered, will create and grant to the Collateral Agent for the benefit of the
Secured Parties (upon (i) the filing of the appropriate UCC-1 financing
statements with the filing offices listed on Schedule 3.18(a) hereto, a valid
and first priority perfected security interest in the Collateral, subject only
to Permitted Liens.
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(b) The Mortgages, when executed and delivered, will create in
favor of the Collateral Agent, for the benefit of the Secured Parties, a legal,
valid and enforceable first priority Lien on all of the Credit Parties'
respective right, title and interest in and to all the Real Property Assets
(except personalty that does not constitute fixtures) and the proceeds thereof.
The Mortgages shall constitute fully perfected first priority Liens on, and
fully perfected first priority security interests in, all right, title and
interest of the Credit Parties' in all the Real Property Assets (except for the
Ancillary Real Property Assets (until Mortgages for the same shall have been
executed and delivered) and personalty that does not constitute fixtures) and
the proceeds thereof, in each case subject only to Permitted Liens.
SECTION 3.19 Disclosure. Neither this Credit Agreement nor any
other Fundamental Document nor any agreement, document, certificate or statement
furnished to any of the Agents, the Issuing Bank or any Lender by or on behalf
of any Credit Party in connection with the transactions contemplated hereby, at
the time it was furnished or delivered, contained any untrue statement of a
material fact regarding the Credit Parties or their Subsidiaries or, when taken
together with all such other agreements, documents, certificates and statements,
omitted to state a material fact necessary under the circumstances under which
it was made in order to make the statements contained herein or therein not
misleading. There is no fact known to any Credit Party which has a Material
Adverse Effect, or could reasonably be expected in the future to have a Material
Adverse Effect.
SECTION 3.20 Environmental Matters. Except as set forth on
Schedule 3.20 hereto, (a) there are no past, pending, or, to the knowledge of
the Borrower, threatened Environmental Claims against, affecting or with respect
to any Credit Party or any Subsidiary of any Credit Party or any Premises, and
no Credit Party nor any Subsidiary of any Credit Party is aware of any facts or
circumstances which could reasonably be expected to form the basis for any such
Environmental Claim, except to the extent that any such Environmental Claims,
individually or in the aggregate, would not have a Material Adverse Effect;
(b) No Premises is currently or was formerly used for the
handling, storage, treatment, disposal, manufacture, processing or generation of
Hazardous Materials, except to the extent that any such activity, individually
or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect on any Credit Party or any Subsidiary of a Credit Party.
(c) Each Credit Party and each Subsidiary of any Credit Party
have obtained and hold all required material Environmental Permits, except to
the extent that any failure to obtain or hold any such Environmental Permit,
individually or in the aggregate, would not have a Material Adverse Effect;
(d) Each Credit Party and each Subsidiary of each Credit Party is
in compliance with all terms, conditions and provisions of all applicable (1)
Environmental Permits and (2) Environmental Laws, except to the extent that any
such non-compliance, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect;
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(e) No Releases of Hazardous Materials have occurred at, from,
in, to, on, or under any Premises, and no Hazardous Materials are present at,
in, on, about or migrating to or from any Premises, except to the extent that
any such Releases or presence of Hazardous Materials, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect;
(f) Neither any Credit Party nor any Subsidiary of any Credit
Party, nor any predecessor of any Credit Party or Subsidiary of any Credit
Party, to the knowledge of Borrower, has transported or arranged for the
treatment, storage, handling, disposal, or transportation of any Hazardous
Material to any location (other than any Premises) which could result in an
Environmental Claim against any Credit Party or any Subsidiary of any Credit
Party, except to the extent that any such Environmental Claim, individually or
in the aggregate, would not reasonably be expected to have a Material Adverse
Effect;
(g) No Premises is a current, or to the knowledge of any Credit
Party or any Subsidiary of any Credit Party, a proposed Environmental Clean-up
Site, except to the extent such listing or designation would not reasonably be
expected to have a Material Adverse Effect;
(h) There are no (i) underground storage tanks (active or
abandoned), (ii) polychlorinated biphenyl containing equipment, (iii)
asbestos-containing material at any Premises, or (iv) lead-based paint located
at any Premises, except to the extent that the presence of any of the foregoing,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect; and
(i) There have been no material environmental investigations,
studies, audits, tests, reviews or other analyses conducted by, or on behalf of,
and which are in the possession of any Credit Party or any Subsidiary of any
Credit Party with respect to any Premises which have not been delivered to the
Agents except for such investigations, studies, audits, tests, reviews or
analyses which do not individually or in the aggregate reveal environmental
conditions that could have a Material Adverse Effect.
SECTION 3.21 Pledged Securities. (a) Annexed hereto as Schedule
3.21(a) under the heading "Pledged Capital Stock and Other Pledged Equity
Interests" is a correct and complete list as of the Closing Date, of all the
Pledged Securities hereunder showing, as to each, the entity whose stock or
other equity interests are being pledged, the Pledgor of such stock or other
equity interests, the stock certificate number (if applicable) and the number of
shares or amount of the capital stock or other equity interests being pledged
hereunder. Also set forth on Schedule 3.21(a) under the heading "Non-Pledged
Capital Stock" is a list of the Subsidiaries directly or indirectly owned or
controlled by a Credit Party whose Capital Stock will not be pledged hereunder.
Each Pledgor (i) is the legal and beneficial owner of, and has sole right, title
and interest to, the Pledged Securities owned by such Pledgor, free and clear of
all Liens, security interests or other encumbrances whatsoever, except the
security interests created by this Credit Agreement, the other Fundamental
Documents, the Note Agreement, the A-Advanced Guaranty and the Subordinated
Security Agreement and, solely with respect to Pledged Securities of a foreign
Subsidiary, Permitted Liens and (ii) has sole right and power to pledge, and
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grant the security interest in, and Lien upon, such Pledged Securities pursuant
to this Credit Agreement without the consent of any Person or Governmental
Authority whatsoever.
(b) All of the Pledged Securities are duly authorized, validly
issued, fully paid and non-assessable.
(c) There are no restrictions on the transfer of any of the
Pledged Securities which limit the ability of a Pledgor to pledge such
securities or interests (as applicable) to the Collateral Agent (for the benefit
of the Secured Parties) other than as set forth in the Agreement described in
Section 6.4(i) hereof.
(d) There are no warrants, options, conversion or similar stock
purchase rights currently outstanding with respect to, and no agreements to
purchase or otherwise acquire, any shares of the Capital Stock or other equity
interests of any issuer of any of the Pledged Securities.
(e) There are no securities or obligations of any kind
convertible into any shares of the Capital Stock or other equity interests of
any issuer of any of the Pledged Securities; and
(f) Article 10 of this Credit Agreement is effective to create a
valid, binding and enforceable security interest in, and Lien upon, all right,
title and interest of the Pledgors in the Pledged Collateral and upon the
delivery of the Pledged Securities to the Collateral Agent, such security
interest and Lien constitute a fully perfected first and prior security interest
and Lien upon all right, title and interest of the Pledgors in the Pledged
Collateral.
SECTION 3.22 Compliance with Laws. (a) No Credit Party,
Subsidiary of a Credit Party or any Real Property Asset is in violation of any
Applicable Law (including, without limitation, any Environmental Law or health
care law) or any restrictions of record or agreements affecting any Real
Property Asset, except for such violations which in the aggregate are not
reasonably likely to have a Material Adverse Effect.
(b) No Credit Party, Subsidiary of a Credit Party or any Real
Property Asset is in violation of any zoning or building law, ordinance, rule,
regulation or restriction affecting a Real Property Asset or any building
permit, including, without limitation, any certificate of occupancy, where such
violation could reasonably be expected to result in a Material Adverse Effect.
(c) The Borrowings hereunder, the intended use of the proceeds of
the Loans as contemplated by Section 2.1 hereof, the issuance of the Letters of
Credit hereunder and the performance by the Credit Parties of the Fundamental
Documents, the Note Agreement, the A-Advanced Guaranty and the Subordinated
Security Agreement will not violate any Applicable Law.
SECTION 3.23 Projected Financial Information. The Borrower has
delivered to the Agents certain projections relating to the Borrower consisting
of balance sheets, income statements and cash flows, together with a statement
of the underlying assumptions. Such projected statements are based on good faith
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estimates and assumptions believed to be reasonable at the time made, it being
recognized by the Lenders that such projections as to future events are not to
be viewed as facts and that actual results during the period or periods covered
by any such projections may differ from the projected results.
SECTION 3.24 Real Property. (a) Schedule 3.24(a) is a true and
complete list as of the Closing Date of (i) the street address of each Real
Property Asset owned by a Credit Party, (ii) the Credit Party which owns each
such Real Property Asset, (iii) the appraised value of each such Real Property
Asset, if available, and the date of the applicable appraisal, (iv) the facility
type of each such Real Property Asset, (v) the lease(s) to which each such Real
Property Asset is subject and (vi) the name and address of the lessee of each
such Real Property Asset. The applicable Credit Party has a fee simple title to
each Real Property Asset listed on Schedule 3.24(a) hereto.
(b) Schedule 3.24(b) is a true and complete list as of the
Closing Date of (i) the street address of each Real Property Asset leased by a
Credit Party, (ii) the Credit Party which leases each such Real Property Asset,
(iii) the facility type of such Real Property Asset, (iii) the name and address
of the owner/lessor of each such Real Property Asset, (iv) the leases to which
each such Real Property Asset is subject and (v) the name and address of any
sublessee of each such Real Property Asset.
(c) As of the Closing Date, each lessee or sublessee of a Credit
Party with respect to the Real Property Assets listed on either Schedule 3.24(a)
or Schedule 3.24(b) hereto is identified under the column entitled "Lessee" in
the case of a Real Property Asset listed on Schedule 3.24(a) hereto or
"Sublessee" in the case of a Real Property Asset listed on Schedule 3.24(b)
hereto.
SECTION 3.25 No Default. No Default or Event of Default exists
under or with respect to any Fundamental Document.
SECTION 3.26 Labor Matters. Except as set forth on Schedule 3.26
hereto, there are no collective bargaining agreements or Multiemployer Plans
covering the employees of any Credit Party and no Credit Party has suffered any
strikes, walkouts or work stoppages within the last three (3) years.
SECTION 3.27 Organizational Documents. The documents delivered
pursuant to Section 4.1(b) constitute, as of the Closing Date, all of the
organizational documents (together with all amendments and modifications
thereof) of the Credit Parties as of the Closing Date. The Credit Parties
represent that they have delivered to the Administrative Agent true, correct and
complete copies of each of the documents set forth in Section 4.1(b).
SECTION 3.28 Bank Accounts. Listed on Schedule 3.28 hereto are
all bank accounts maintained as of the Closing Date by a Credit Party.
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4. CONDITIONS TO THE EFFECTIVENESS OF THIS CREDIT AGREEMENT AND
THE MAKING OF THE LOANS
SECTION 4.1 Conditions Precedent to the Effectiveness of This
Credit Agreement and the Making of the Loans. The effectiveness of this Credit
Agreement and the making of the Loans is subject to the satisfaction in full or
waiver of the following conditions precedent:
(a) The Credit Agreement. The Administrative Agent shall have
received executed counterparts of this Credit Agreement, which, when
taken together, bear the signatures of the Agents, the Issuing Bank, all
of the Credit Parties and all of the Lenders;
(b) Supporting Documents of the Credit Parties. The
Administrative Agent shall have received in form and substance
satisfactory to it and its counsel in their sole discretion:
(i) a copy of the Certificate of Incorporation and by-laws or
other organizational documents of each of the Credit Parties, certified
as of a recent date by the Secretary of State of the applicable
jurisdiction or organization of each Credit Party (to the extent
obtainable);
(ii) a certificate of the Secretary of each Credit Party, dated
the Closing Date and certifying (A) that attached thereto is a true and
complete copy of the certificate of incorporation and by-laws or other
organizational documents of such Credit Party as in effect on the date
of such certification; (B) that the certificate of incorporation and
by-laws or other organizational documents of such Credit Party have not
been amended since the date of the last amendment thereto indicated on
the certificate of the Secretary of State furnished pursuant to clause
(i) above, except to the extent specified in such Secretary's
Certificate; (C) that attached thereto is a true and complete copy of
resolutions or other authorizing documents by the Board of Directors or
other appropriate Person or Persons of such Credit Party authorizing the
Borrowings (in the case of the Borrower) or the Guaranty by such Credit
Party (in the case of each Guarantor), the grant by such Credit Party of
the security interests contemplated by the Fundamental Documents and the
execution, delivery and performance by such Credit Party in accordance
with its respective terms of this Credit Agreement, the other
Fundamental Documents to which it is or will be a party and any other
documents required or contemplated hereunder or thereunder and that such
resolutions or other authorizing documents have not been amended,
rescinded or supplemented and are currently in effect; and (D) as to the
incumbency and specimen signature of each officer of such Credit Party
executing this Credit Agreement, any notes evidencing the Loans (in the
case of the Borrower), any other Fundamental Documents, the Note
Agreement, the A-Advanced Guaranty, the Subordinated Security Agreement
or any other document delivered in connection herewith or therewith on
behalf of such Credit Party (such certificate to contain a certification
by another officer of such Credit Party as to the incumbency and
signature of the officer signing the certificate referred to in this
clause (D));
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(iii) a certificate dated as of a recent date as to the good
standing and/or authority to do business (to the extent obtainable) of
the Borrower and the Credit Parties issued by the Secretary of State or
other appropriate governmental official of each jurisdiction for each
such entity; and
(iv) such additional documents relating to the Borrower and any
other Credit Party as the Administrative Agent or its counsel or any
Lender may request;
(c) Opinions of Counsel. The Administrative Agent shall have
received the written opinions of (i) Weil, Gotshal & ▇▇▇▇▇▇ LLP, counsel
to the Credit Parties, (ii) general counsel to the Credit Parties and
(iii) local counsel in each of the states listed on Schedule 4.1(c)
hereto (subject to Section 5.20 hereof), each dated the Closing Date and
addressed to the Agents, the Issuing Bank, the Lenders and the other
Secured Parties with respect to such matters relating to this Credit
Agreement and the Fundamental Documents as may be requested by the
Administrative Agent and its counsel, which opinion shall be in form and
substance satisfactory to the Administrative Agent and its counsel in
their sole discretion;
(d) No Material Adverse Effect. No Material Adverse Effect shall
have occurred since June 30, 2002, other than those changes which have
occurred in connection with the administration by the Bankruptcy Court
of the Cases;
(e) Material Agreements. The Administrative Agent or its counsel
shall have received a copy, certified by the Borrower, of each agreement
listed on Schedule 3.17(b) hereto;
(f) Financing Statements/Possession of Collateral. The
Collateral Agent shall have (i) received for filing all appropriate UCC
financing statements to perfect its security interest in the Collateral
and evidence satisfactory to the Collateral Agent that such UCC
financing statements will be filed on or promptly after the Closing
Date, together with any related filing fees or similar charges or taxes
payable in connection with such filing; (ii) received the Pledged
Securities (to the extent such Pledged Securities are represented by a
certificate or other instrument) with appropriate undated stock powers
or other appropriate documents executed in blank and (iii) received
delivery of all Collateral of the type specified in Section 9-313 of the
UCC;
(g) Mortgages. The Collateral Agent shall have received, subject
to Section 5.20 hereof, (i) a duly executed Mortgage and appropriate
UCC-1 Financing Statements with respect to each Real Property Asset, in
each case in form suitable for recording or filing with the appropriate
filing office and (ii) evidence satisfactory to the Collateral Agent in
its sole discretion that each of the Mortgages and UCC-1 financing
statements has been promptly recorded or filed with the appropriate real
property recording or filing office;
(h) Proprietary Rights Security Agreements. The Collateral Agent
shall have received a duly executed Patent Security Agreement in form
suitable for recording or filing with the United States Patent and
Trademark Office;
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(i) Title Insurance. Within forty-five (45) days of the Closing
Date, the Collateral Agent shall have received (a) an ALTA (or the
equivalent in the State where each Real Property Asset is located)
standard form mortgagee title insurance policy (the "Mortgage Policies")
issued by the Title Company with respect to each Real Property Asset, in
amounts reasonably acceptable to the Collateral Agent, insuring fee
simple or leasehold title to each such Real Property Asset and insuring
in favor of the Collateral Agent that the applicable Mortgages create
valid and enforceable first priority mortgage Liens on the respective
Real Property Assets encumbered thereby, which Mortgage Policies shall
include an endorsement for mechanics' liens, for future advances under
this Agreement and shall be in form and substance reasonably acceptable
to the Collateral Agent and (b) evidence satisfactory to the Collateral
Agent that such Credit Party has paid to the Title Company or to the
appropriate governmental authorities all expenses and premiums of the
Title Company and all other sums required in connection with the
issuance of the Real Property Assets and all recording and stamp taxes
(including mortgage recording and intangible taxes, if any) payable in
connection with recording the Mortgages in the appropriate real estate
records;
(j) Copies of Documents Relating to Title Exceptions. Within
forty-five (45) Days of the Closing Date, the Collateral Agent shall
have received copies of all recorded documents listed as exceptions to
title or otherwise referred to in the Mortgage Policies or in the title
reports delivered pursuant to Section 4.1(i) above;
(k) Surveys. Within forty-five (45) days after the Closing Date,
with respect to each Real Property Asset, Borrower shall cause to be
delivered to the Title Company a survey or other document in such form
as shall be required by the Title Company issuing the Mortgage Policy
with respect to such Real Property Assets to remove the standard survey
exception in coverage for matters which would be disclosed by an
accurate survey.
(l) Zoning Laws, etc. The Collateral Agent shall be satisfied in
its sole discretion with the Credit Parties' compliance with all zoning,
environmental and other laws, ordinances, rules and regulations
affecting or relating to each Real Property Asset;
(m) Evidence of Title. The Collateral Agent shall be satisfied
in its reasonable discretion that each Credit Party has sufficient
right, title and interest in and to the Collateral, the Real Property
Assets and other assets which it purports to own, as set forth in the
documents and other materials presented to the Agents to enable such
Credit Party to grant to the Collateral Agent for the benefit of the
Secured Parties the security interests contemplated by the Fundamental
Documents, and that all financing statements, mortgages and other
filings under Applicable Law necessary to provide the Collateral Agent
for the benefit of the Secured Parties with a first priority perfected
security interest in the Pledged Securities, the Collateral and all Real
Property Assets (subject in the case of the Collateral and the Real
Property Assets, to Permitted Liens) have been filed and all taxes,
recording or other fees relating thereto have been paid, or, have been
delivered to the Collateral Agent in satisfactory form for filing;
(n) Insurance. The Administrative Agent and the Collateral Agent
shall have received (i) a summary of all existing insurance coverage
maintained by the Credit Parties and their Subsidiaries which summary
shall include for each insurance policy, the policy number, the type of
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coverage, the policy limits and deductibles, the insurer and the
expiration date and (ii) evidence acceptable to the Administrative Agent
and the Collateral Agent that the insurance policies required by Section
5.5 have been obtained and are in full force and effect, including
Certificates of Insurance with respect to all existing insurance
coverage maintained by the Credit Parties and/or their Subsidiaries
which is set forth on the summary delivered pursuant to clause (i)
above, which certificates shall comply with the requirements set forth
in Section 5.5 hereof;
(o) Payment of the Fees. The Agents (for their benefit and the
benefit of the Lenders) shall have received all Fees due and payable on
or before the Closing Date pursuant to the Fee Letter or this Credit
Agreement;
(p) Notes. For each Lender that has requested that the Loans
made by it be evidenced by a promissory note, the Administrative Agent
shall have received one or more promissory notes each duly executed on
behalf of the Borrower, dated the date hereof and payable to the order
of such Lender in the principal amount equal to such Lender's
Commitment;
(q) Payment of Other Fees and Expenses. All out-of-pocket
expenses incurred by the Administrative Agent, the Collateral Agent and
the Issuing Bank in connection with this Credit Agreement and the
transactions contemplated hereby, including, without limitation, all
statements presented for reasonable fees and disbursements of (i) any
financial, accounting or valuation advisors or special counsel retained
by the Agents (including, but not limited to, ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇
LLP, counsel to the Agents) and (ii) King & Spalding, special counsel to
certain of the Lenders hereunder, shall have been paid by the Borrower;
(r) Litigation. No litigation, inquiry, injunction or
restraining order shall be pending, entered or threatened which involves
this Credit Agreement, any of the other Fundamental Documents, the Note
Agreement, the A-Advanced Guaranty or the Subordinated Security
Agreement or which could reasonably be expected to have a Material
Adverse Effect;
(s) Required Consents and Approvals. The Administrative Agent
shall be satisfied in its sole discretion that all required consents and
approvals have been obtained with respect to the transactions
contemplated hereby from all Governmental Authorities with jurisdiction
over the business and activities of any Credit Party and from any other
entity whose consent, waiver or approval is required pursuant to the
terms of existing contracts to which any of the Credit Parties is bound
and which the Administrative Agent in its sole discretion deems
necessary to the transactions contemplated hereby;
(t) Compliance with Laws. The Lenders shall be satisfied in
their sole discretion that the transactions contemplated hereby will not
violate any provision of Applicable Law, or any order of any court or
other agency of the United States or any state thereof applicable to any
of the Credit Parties or any of their respective properties or assets;
(u) Representations and Warranties; No Default. The
representations and warranties set forth in Article 3 hereof and in any
other Fundamental Documents then in existence shall be true and correct
in all material respects, and no Default or Event of Default shall have
occurred and be continuing hereunder;
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(v) Closing Certificate. The Administrative Agent shall have
received a closing certificate signed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit F hereto;
(w) Approval of Counsel to the Agents. All legal matters
incident to this Credit Agreement, the Fundamental Documents, the Note
Agreement, the A-Advanced Guaranty, the Subordinated Security Agreement
and the transactions contemplated hereby and thereby shall be
satisfactory to ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel to the Agents and
the Issuing Bank;
(x) Other Documents. The Agents and their counsel shall have
received fully executed originals of the Intercreditor Agreement, the
Contribution Agreement the account control and blocked account
agreements referred to in Section 8.3 and such other documentation as
the Agents or their counsel may request, all in form and substance
satisfactory to the Administrative Agent and the Collateral Agent in
their sole discretion;
(y) Final Order. A Final Order approving the Plan of
Reorganization and the credit facilities contemplated hereby shall have
been entered by the Bankruptcy Court (which shall, among other things,
approve entry by the Credit Parties into this Credit Agreement, the
Fundamental Documents, the Note Agreement, the A-Advanced Guaranty, the
Subordinated Security Agreement, the Loans and the transactions
contemplated by this Credit Agreement, the Fundamental Documents, the
Note Agreement, the A-Advanced Guaranty and the Subordinated Security
Agreement) and shall otherwise be in form and substance satisfactory to
the Administrative Agent in its sole discretion, and the Effective Date
provided thereunder shall have occurred;
(z) Total Funded Debt. Total Funded Debt (after giving effect to
any Loans to be made on the Closing Date, the Notes and any other
Indebtedness to be outstanding upon the effectiveness of the Plan of
Reorganization) shall not exceed $16,500,000 million;
(aa) Plan of Reorganization. Substantial consummation of the
Plan of Reorganization in accordance with the terms thereof and of the
Final Order shall occur concurrently with the Closing Date;
(bb) Notes. Execution and delivery of the Note Agreement in form
and substance and with terms satisfactory to the Administrative Agent in
its sole discretion (including, but not limited to, (i) a maximum note
value of $135,000,000, (ii) a maximum interest rate of 9.89% (plus any
applicable default rate interest payable under the Note Agreement),
(iii) a maturity date that is not earlier than the maturity date of the
Commitment Termination Date, (iv) scheduled amortization in any year
prior to final maturity not exceeding 1% of the original aggregate note
value on the date of issuance of the Notes and (v) covenants customary
for agreements similar to the Note Agreement and customary provisions
relating to the exercise of any remedies against any collateral with
respect to the Notes satisfactory to the Administrative Agent in its
sole discretion); and
SECTION 4.2 Conditions Precedent to Each Loan and each Letter of
Credit. The obligation of the Issuing Bank to issue each Letter of Credit and of
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the Lenders to make each Loan and to participate in each Letter of Credit
(including the initial Loan and/or Letter of Credit) are subject to the
following conditions precedent:
(a) Notice. The Administrative Agent shall have received a notice
with respect to such Borrowing or the Issuing Bank and the Administrative Agent
shall have received a notice with respect to such Letter of Credit as required
by Section 2.1 or Section 2.18 hereof, as applicable;
(b) Borrowing Certificate. The Administrative Agent shall have
received a Borrowing Certificate with respect to such Borrowing, duly executed
by an Authorized Officer of the Borrower;
(c) Representations and Warranties. The representations and
warranties set forth in Article 3 hereof and in the other Fundamental Documents
shall be true and correct in all material respects on and as of the date of each
Borrowing or issuance of a Letter of Credit (except to the extent that such
representations and warranties expressly relate to an earlier date) with the
same effect as if made on and as of such date;
(d) No Event of Default. On the date of each Borrowing or
issuance of a Letter of Credit hereunder, no Default or Event of Default shall
have occurred and be continuing, nor shall any such event occur by reason of the
making of the requested Loan or the issuance of the requested Letter of Credit;
and
(e) Maximum Credit Amount. After giving effect to the Loans to be
made or Letters of Credit to be issued, the aggregate principal amount
outstanding of all Loans plus the then current L/C Exposure shall not exceed the
Maximum Credit Amount.
Each request for a Borrowing or issuance of a Letter of Credit hereunder shall
be deemed to be a representation and warranty by the Borrower on the date of
such Borrowing or issuance of a Letter of Credit hereunder as to the matters
specified in paragraphs (c), (d) and (e) of this Section 4.2.
5. AFFIRMATIVE COVENANTS
From the date hereof and for so long as any Commitments shall be
in effect, any amount remains outstanding with respect to any Loan, any Letter
of Credit shall remain outstanding (or not cash collateralized in an amount
equal to 105% of the then current L/C Exposure) or any Obligation remains unpaid
or unsatisfied, each Credit Party agrees that, unless the Required Lenders shall
otherwise consent in writing, each of them will and will (in the case of
Sections 5.2, 5.3, 5.4, 5.5, 5.7, 5.8, 5.11 and 5.18) cause each of their
respective Subsidiaries to:
SECTION 5.1 Financial Statements and Reports. Subject to the last
paragraph of this Section 5.1, furnish or cause to be furnished to the Agents,
the Issuing Bank and each of the Lenders:
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(a) As soon as available, but in any event within ninety (90)
days after the end of each fiscal year of the Borrower (commencing with fiscal
year ending September 30, 2002), the consolidated and consolidating balance
sheets of the Borrower and its Consolidated Subsidiaries, in each case as at the
end of, and the related consolidated statements of income, stockholders' equity
and cash flows for, such fiscal year, and the corresponding figures as at the
end of, and for, the preceding fiscal year, and in the case of such consolidated
statements, certified by and accompanied by an unqualified report and opinion of
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, or another independent public accountant of recognized standing
as shall be retained by the Borrower and be satisfactory to the Administrative
Agent, which report and opinion shall be prepared in accordance with generally
accepted auditing standards relating to reporting and which report and opinion
shall contain no material exceptions or qualifications except for qualifications
relating to accounting changes (with which such independent public accountants
concur) in response to FASB releases or other authoritative pronouncements;
(b) As soon as available, but in any event within forty-five (45)
days after the end of each of the first three fiscal quarters of each of its
fiscal years, the unaudited, consolidated and consolidating balance sheets of
the Borrower and its Consolidated Subsidiaries as at the end of, and the related
unaudited consolidated statements of income, stockholders' equity and cash flows
for, such quarter, and for the portion of the fiscal year through the end of
such quarter, and the corresponding figures as at the end of such quarter, and
for the corresponding period, in the preceding fiscal year, together with a
certificate signed by the Chief Financial Officer of the Borrower, on behalf of
the Borrower, to the effect that such financial statements, while not examined
by independent public accountants, reflect, in the opinion of the Borrower, all
adjustments necessary to present fairly the financial position of the Borrower
and its Consolidated Subsidiaries as at the end of the fiscal quarter and the
results of operations for the quarter then ended in conformity with GAAP,
subject to normal year-end audit adjustments and the absence of footnotes;
(c) As soon as available, but in any event within thirty (30)
days after the end of each month (or within forty-five (45) days after the end
of each month which is also the end of a fiscal quarter), (i) the unaudited,
consolidated and consolidating balance sheets of the Borrower and its
Consolidated Subsidiaries, as at the end of such month, and the related
consolidated statements of income and cash flows for, such month, and for the
portion of the fiscal year through the end of such month, and the corresponding
figures as at the end of such month, and for the corresponding period as set
forth in the Borrower's current operating budget, in the preceding fiscal year,
together with a certificate signed by the Chief Financial Officer of the
Borrower, on behalf of the Borrower, to the effect that such financial
statements, while not examined by independent public accountants, reflect, in
the opinion of the Borrower, all adjustments necessary to present fairly the
financial position of the Borrower and its Consolidated Subsidiaries as at the
end of the month and the results of operations for the month then ended in
conformity with GAAP, subject to normal year-end audit adjustments and the
absence of footnotes;
(d) Simultaneously with the delivery of the statements referred
to in paragraphs (a), (b) and (c) of this Section 5.1, a certificate of the
Chief Financial Officer of the Borrower in form and substance reasonably
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satisfactory to the Administrative Agent (i) stating whether or not the Chief
Financial Officer has knowledge, after due inquiry, of any condition or event
which would constitute an Event of Default or Default and, if so, specifying
each such condition or event and the nature thereof and what action any Credit
Party is taking or proposes to take with respect thereto and (ii) demonstrating
in reasonable detail compliance with the provisions of Sections 6.9 through 6.13
hereof;
(e) Together with each set of audited financial statements
required by paragraph (a) above, a letter from the independent public
accountants rendering the report thereon stating whether, in connection with
their audit examination, any condition or event, at any time during, or at the
end of, the accounting period covered by such financial statements, has come to
their attention which would cause them to believe that any Default or Event of
Default existed on the date of such financial statements, and if such a
condition or event has come to their attention, specifying the nature and
period, if known, of existence thereof;
(f) Promptly upon their becoming available, copies of all
material audits, studies, reports or evaluations prepared for, or submitted to,
any of the Credit Parties by any outside professional firm or service,
including, without limitation, any comment letter submitted by the Borrower's
accountants to management in connection with their annual audit;
(g) Promptly upon their becoming available, copies of all
registration statements, proxy statements, notices and reports which the
Borrower or any other Credit Party shall file with any securities exchange or
with the Securities and Exchange Commission or any successor agency;
(h) Within thirty (30) days after the end of each fiscal year, a
set of financial projections for the Borrower and its Consolidated Subsidiaries
for the next fiscal year in a form and in reasonable detail satisfactory to the
Administrative Agent;
(i) Promptly and in any event within five (5) Business Days after
receipt of any material notice or correspondence from any company or agent for
any company providing insurance coverage to any Credit Party or any Subsidiary
of a Credit Party relating to any material loss with respect to any Real
Property Asset, copies of such notices and/or correspondence;
(j) Without limiting any Credit Party's other obligations to give
notice under the Fundamental Documents, within twenty (20) days of the end of
each calendar quarter, a schedule setting forth each sale or other disposition
of any asset or property effected outside the ordinary course of business during
such quarter, the date of each such sale or disposition, the sales price with
respect to such asset or property sold or disposed of and the Net Cash Proceeds
received during such quarter from each such sale or disposition;
(k) Each month, within three (3) Business Days after the end of
the prior month, a Borrowing Base Certificate;
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(l) At the request of the Agents, provide to the Agents any
documents used in the preparation of any Borrowing Base Certificate, including
without limitation, accounts receivables agings and reconciliations;
(m) Within three (3) Business Days after the end of each fiscal
quarter, provide to Congress Financial, with a copy to the Administrative Agent,
any documents necessary for Congress Financial or the Administrative Agent to
recalculate the applicable Credit Memo Lag Reserve for the next fiscal quarter.
(n) From time to time such additional information regarding the
financial condition or business of any of the Credit Parties or any of their
respective Subsidiaries, any Real Property Asset or the Collateral, as any of
the Agents, the Issuing Bank or any Lender acting through the Administrative
Agent may reasonably request including, without limitation, copies of all
management projections prepared at the reasonable request of either of the
Agents.
Information required to be delivered pursuant to clauses (a), (b) or (c) of this
Section 5.1 shall be deemed to have been delivered on the date on which the
Borrower provides notice to the Agents, Issuing Bank and each Lender that such
information has been posted on the Borrower's website on the Internet at the
website address listed on the signature pages hereof, at
[▇▇▇.▇▇▇/▇▇▇▇▇/▇▇▇▇▇▇▇▇.▇▇▇] or at another website identified in such notice and
accessible by the Lenders without charge; provided, that (i) such notice may be
included in a certificate delivered to the Administrative Agent pursuant to
subsection (d) hereof and (ii) the Borrower shall deliver paper copies of the
information referred to in paragraphs (a), (b), (c) and (d) of this Section 5.1
to any Lender that requests such delivery. All other notices and information
required to be provided pursuant to this Section 5.1 shall be deemed delivered
pursuant to this Section 5.1 when delivered to the Administrative Agent;
provided, that the Borrower shall deliver paper copies of any such notice or
information to any Lender that requests such delivery.
SECTION 5.2 Compliance with Laws. (a) Do or cause to be done all
things necessary (i) to preserve, renew and keep in full force and effect its
existence, its licenses, permits, franchises, certificates (including, without
limitation, certificates of need), authorization, accreditations, easements,
rights of way and other rights, consents and approvals the nonexistence of which
is reasonably likely to have a Material Adverse Effect and (ii) to comply with
all applicable statutes, ordinances, rules, regulations and orders of, and all
applicable restrictions or requirements imposed by, any Governmental Authority
(including, without limitation, health care laws, Environmental Laws, all zoning
and building codes and ERISA) or any other Requirements except where the
necessity of compliance therewith is contested in good faith by the appropriate
proceedings or where such noncompliance in the aggregate would not reasonably be
expected to have a Material Adverse Effect; provided, in each case, that the
applicable Credit Party or Subsidiary of a Credit Party shall have set aside on
its books reasonable reserves (the presentation of which is segregated to the
extent required by GAAP) with respect thereto if such reserves are required by
GAAP or where such noncompliance in the aggregate would not reasonably be
expected to have a Material Adverse Effect.
(b) Obtain or make all further authorizations, approvals, orders,
consents, licenses, registration or filings from or with any Governmental
Authority required for the performance by any Credit Party of this Credit
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Agreement, the other Fundamental Documents, the Note Agreement, the A-Advanced
Guaranty and the Subordinated Security Agreement to which it is a party.
SECTION 5.3 Maintenance of Properties. Keep its tangible
properties including, without limitation, each item of Collateral and each Real
Property Asset, in good repair, working order and condition (ordinary wear and
tear and damage by casualty excepted) and, from time to time (i) subject to the
terms hereof, make all necessary and proper repairs, renewals, replacements,
additions and improvements thereto and (ii) comply at all times with the
provisions of all, leases and other material agreements to which it is a party
so as to prevent any loss or forfeiture thereof or thereunder unless compliance
therewith is being currently contested in good faith by appropriate proceedings
and appropriate reserves have been established in accordance with GAAP or where
such noncompliance in the aggregate would not reasonably be expected to have a
Material Adverse Effect.
SECTION 5.4 Notice of Material Events. (a) Promptly upon, but in
any event within five (5) days after, an Authorized Officer or other executive
officer of any Credit Party obtaining knowledge of (i) any (X) Default or (Y)
Event of Default, (ii) any Material Adverse Effect, (iii) any action, event or
condition which could reasonably be expected to have a Material Adverse Effect,
(iv) any other event which could reasonably be expected to materially decrease
the aggregate value of the Collateral, any Real Property Asset or the Pledged
Securities, (v) any proposed material amendment to any agreements that are a
material part of the Collateral or relate to any material Real Property Asset,
(vi) any Person giving any notice to any Credit Party or taking any other action
to enforce remedies with respect to a claimed default or event or condition of
the type referred to in paragraph (i), (j), (k) or (l) of Article 7, (vii) any
strike, walkout, work stoppage or other material labor difficulty with respect
to any Credit Party or Subsidiary of a Credit Party or (viii) any pending or
contemplated condemnation proceeding affecting any Real Property Asset which
would result in Net Cash Proceeds of $100,000 or more, give written notice
thereof to the Administrative Agent specifying the nature and period of
existence of any such condition or event, or specifying the notice given or
action taken by such Person and the nature of such claimed Event of Default or
condition and what action any Credit Party has taken, is taking and proposes to
take with respect thereto.
(b) Promptly upon, but in any event within ten (10) days after,
an Authorized Officer or other executive officer of any Credit Party obtains
knowledge of (i) the institution of, or threat of, any action, suit, proceeding,
investigation or arbitration by any Governmental Authority or other Person
against or affecting any Credit Party or any of its assets including, without
limitation, any Real Property Asset but excluding any condemnation proceeding or
any sale or disposition in lieu of condemnation with respect to any Real
Property Asset which would result in Net Cash Proceeds of less than $100,000 and
(ii) any material development in any such action, suit, proceeding,
investigation or arbitration (whether or not previously disclosed to the
Administrative Agent), which, in the case of clause (i) or (ii) above, is
reasonably likely to have a Material Adverse Effect, such Credit Party shall
promptly give written notice thereof to the Administrative Agent and provide
such other information as may be available to it to enable the Administrative
Agent to evaluate such matters; and, in addition to the requirements set forth
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in clauses (i) and (ii) of this subsection (b), such Credit Party upon request
shall promptly give notice to the Administrative Agent of the status of any
action, suit, proceeding, investigation or arbitration covered by a report
delivered to the Administrative Agent pursuant to this subsection (b) above and
provide such other information as may be reasonably available to it to enable
the Agents to evaluate such matters.
SECTION 5.5 Insurance. (a) Keep its assets which are of an
insurable character (including, without limitation, all Real Property Assets)
insured at all times with financially sound and reputable insurance companies,
against such risks as is customary for companies of the same or similar size in
the same or similar businesses; provided, that such insurance shall (i) insure
the assets (including, without limitation, all Real Property Assets and all
Collateral) of the Credit Parties (other than motor vehicles) against all risk
of loss or damage including, without limitation, loss by fire, explosion, theft
and such other casualties as may be reasonably satisfactory to the Collateral
Agent, but in no event in an amount less than the replacement cost value thereof
and (ii) insure the Credit Parties and the Agents, the Issuing Bank and the
Lenders against comprehensive general and automobile liability, such policies to
be in accordance with customary industry practice and in such form and amounts
and having such coverage as is customary for companies of the same or similar
size in the same or similar businesses or as otherwise may be reasonably
satisfactory to the Administrative Agent and the Collateral Agent. All such
insurance shall (i) contain a Lender's Loss Payable Endorsement in favor of the
Collateral Agent on behalf of the Secured Parties in all loss or damage
insurance policies, (ii) provide that no cancellation, material reduction in
amount or material change in coverage thereof shall be effective until at least
thirty (30) days after written notice to the Collateral Agent (on behalf of the
Secured Parties) thereof, (iii) name the Collateral Agent (for the benefit of
the Secured Parties) as loss payee for physical damage insurance with respect to
property which constitutes Collateral or a Real Property Asset as to which a
Lien has been granted to the Collateral Agent, with the right, if an Event of
Default has occurred and is then continuing, to adjust losses and claims with
respect to such property, and as an additional insured for liability insurance,
(iv) state that neither the Agents, any of the Lenders, nor any other Secured
Party shall be responsible for premiums, commissions, club calls, assessments or
advances and (v) be reasonably satisfactory in all other respects (including
deductibles) to the Administrative Agent and the Collateral Agent.
(b) Upon the request of the Administrative Agent or the
Collateral Agent, furnish to such Agent, an updated schedule describing all
insurance maintained by the Credit Parties, which schedule shall set forth, for
each insurance policy, the policy number, the type of coverage, the policy
limits and deductibles, the insurer and the expiration date.
(c) Furnish to the Administrative Agent and the Collateral Agent,
to the extent not previously delivered, original certificates of insurance for
all insurance maintained by a Credit Party which certificates shall comply with
the requirements of this Section 5.5 set forth above and contain signatures of
duly authorized representatives of the insurer, at all times prior to policy
termination, cessation or cancellation.
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(d) Maintain such other insurance or self insurance as may be required by
Applicable Law or any agreement to which any Credit Party is a party or as
either the Administrative Agent or the Collateral Agent may reasonably request.
SECTION 5.6 Books and Records. (a) Maintain or cause to be
maintained at all times, in accordance with GAAP, true and complete books and
records of its financial operations.
(b) Provide either Agent, the Issuing Bank and their
representatives (at the Borrower's expense) or any Lender and its
representatives (at such Lender's expense) access to such books and records and
to any of its properties or assets upon reasonable notice and during regular
business hours in order that such Agent, the Issuing Bank or such Lender (as
applicable) may make such audits and examinations and make abstracts from such
books, accounts, records and other papers of a Credit Party or a Subsidiary of a
Credit Party pertaining to the Collateral or any Real Property Asset and upon
notification to the Borrower, permit such Agent, the Issuing Bank or such Lender
(as applicable) or its representatives to discuss the affairs, finances and
accounts with, and be advised as to the same by, officers and independent
accountants, all as such Agent, the Issuing Bank or such Lender (as applicable)
may deem appropriate for the purpose of verifying any report delivered by any
Credit Party to any of the Agents, the Issuing Bank and/or the Lenders pursuant
to this Credit Agreement or for otherwise ascertaining compliance with this
Credit Agreement or any other Fundamental Document.
SECTION 5.7 Observance of Agreements. (a) Duly observe and
perform all material terms and conditions of any agreement relating to any Real
Property Asset or any other agreement which is material to the Credit Parties
taken as a whole and diligently protect and enforce the rights of the Credit
Parties and their Subsidiaries under all such agreements in a manner consistent
with prudent business judgment and subject to the terms and conditions of such
agreements.
(b) Promptly provide the Agents copies of any and all agreements
amending, altering, modifying, waiving or supplementing in any material respect
the Note Agreement and any other agreement which is material to the Credit
Parties taken as a whole.
SECTION 5.8 Taxes and Charges. Duly pay and discharge, or cause
to be paid and discharged, before the same shall become in arrears (after giving
effect to applicable extensions), all taxes, assessments, levies and other
governmental charges, imposed upon any Credit Party or Subsidiary of a Credit
Party or its properties, sales and activities, or any part thereof, or upon the
income or profits therefrom, as well as all claims for labor, materials, or
supplies which if unpaid might by law become a Lien upon any property of any
Credit Party; provided, however, that any tax, assessment, levy, governmental
charge or claim for labor, material or supplies need not be paid if the validity
or amount thereof shall currently be contested in good faith by appropriate
proceedings and if such Credit Party or Subsidiary of a Credit Party shall have
set aside on its books reasonable reserves (the presentation of which is
segregated to the extent required by GAAP) with respect thereto if such reserves
are required by GAAP; and provided, further, that such Credit Party or
Subsidiary of a Credit Party will pay all such taxes, assessments, levies or
other governmental charges and claims for labor, material or supplies forthwith
upon the commencement of proceedings to foreclose any Lien which may have
attached as security therefor.
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SECTION 5.9 Liens. Defend the Collateral (including, without
limitation, the Pledged Securities) and the Real Property Assets against any and
all Liens, claims and other impediments howsoever arising, other than Permitted
Liens, and in any event defend the same against any attempted foreclosure.
SECTION 5.10 Further Assurances; Security Interests. (a) Upon the
request of either of the Agents, duly execute and deliver, or cause to be duly
executed and delivered, at the cost and expense of the Credit Parties, such
further instruments as may be necessary in the reasonable judgment of such Agent
or its counsel to carry out the provisions and purposes of this Credit Agreement
and the other Fundamental Documents.
(b) Upon the request of the Collateral Agent, promptly execute
and deliver or cause to be executed and delivered, at the cost and expense of
the Credit Parties, such further instruments as may be appropriate in the
reasonable judgment of the Collateral Agent or its counsel, to provide the
Collateral Agent for the benefit of the Secured Parties a first perfected Lien
in the Collateral and all the Real Property Assets, and any and all documents
(including, without limitation, an amendment or supplement of any financing
statement and a continuation statement or other statement) for filing under the
provisions of the UCC and the rules and regulations thereunder, or any other
Applicable Law of the United States or any other jurisdiction which either Agent
may deem reasonably necessary or advisable, and perform or cause to be performed
such other ministerial acts which are reasonably necessary or advisable, from
time to time, in order to grant and maintain in favor of the Collateral Agent
for the benefit of the Secured Parties the security interest in the Collateral
and the Real Property Assets contemplated hereunder and under the other
Fundamental Documents, subject only to Permitted Liens.
(c) Promptly undertake to deliver or cause to be delivered to the
Collateral Agent from time to time such other documentation, consents,
authorizations and approvals, in form and substance reasonably satisfactory to
the Collateral Agent, as the Collateral Agent or its counsel shall deem
reasonably necessary or advisable to perfect or maintain the Liens of the
Collateral Agent for the benefit of the Secured Parties including, without
limitation, updated copies of Schedule A and Schedule B to the Trademark
Security Agreement or the Patent Security Agreement, respectively, at the end of
any fiscal quarter in which a Credit Party applies for the registration of,
registers or otherwise acquires any Patent or Trademark (as applicable) not
listed on Schedule A to the relevant Agreement or any Patent license or
Trademark license (as applicable) not listed on Schedule B to the relevant
Agreement.
(d) Without limiting the generality of the foregoing provisions
of this Section 5.10, use commercially reasonable efforts to correct as soon as
practicable, matters with respect to title concerning the properties set forth
on Schedule 3.10(a) hereto.
SECTION 5.11 Environmental Laws. (a) Promptly notify the
Administrative Agent and the Collateral Agent upon any Credit Party gaining
actual knowledge of any violation or non-compliance with, or liability or
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potential liability under, any Environmental Laws which, when taken together
with all other violations of, or liability under, Environmental Law is
reasonably be expected to have a Material Adverse Effect, and promptly furnish
to the Administrative Agent and the Collateral Agent all written notices of any
nature which any Credit Party or any Subsidiary of a Credit Party may receive
from any Governmental Authority or other Person with respect to any violation,
or potential violation or non-compliance with, or liability or potential
liability under, any Environmental Laws which, in any case or when taken
together with all such other notices, could reasonably be expected to have a
Material Adverse Effect.
(b) Comply with and use commercially reasonable efforts to ensure
compliance by all tenants and subtenants with all Environmental Laws, and obtain
and comply in all respects with and maintain and use commercially reasonable
efforts to ensure that all tenants and subtenants obtain and comply in all
respects with and maintain any and all Environmental Permits required by
Environmental Laws, except where failure to do so is not reasonably likely to
have a Material Adverse Effect.
(c) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under all
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities, except where failure to
do so would not have a Material Adverse Effect. Any order or directive whose
lawfulness is being contested in good faith by appropriate proceedings shall be
considered a lawful order or directive when such proceedings, including any
judicial review of such proceedings, have been finally concluded by the issuance
of a final non-appealable order; provided, however, that the appropriate Credit
Party shall have set aside on its books reasonable reserves (the presentation of
which is segregated to the extent required by GAAP) with respect thereto.
(d) Indemnify, defend and hold harmless the Agents, the Issuing
Bank, the Lenders and the other Secured Parties, and their respective officers,
directors, shareholders, employees, agents, representatives, successors and
assigns from and against any liability, fine, penalty, loss, damage, suit,
settlement, action, expense and cost (including, but not limited to, reasonable
attorneys' fees (including cost of in-house counsel) and environmental
consultant fees), arising out of or relating to: (A) the presence or Release of
any Hazardous Materials at, to, on, under or from any Premises; (B) any
violation of any Environmental Law or Environmental Permit by any Credit Party
or any Subsidiary of any Credit Party; (C) the transportation or the arrangement
for the transportation, handling, treatment, or disposal of any Hazardous
Materials to any location other than any Premises by or on behalf of any Credit
Party or any Subsidiary of any Credit Party; (D) any Environmental Claim
relating to any Premises or any activities conducted at any Premises; and (E)
any breach of any environmental representation or covenant in this Credit
Agreement or any other Fundamental Document (but excluding any such liability,
fine, penalty, loss, damage, suit, settlement, action, expense or cost of an
indemnified party to the extent primarily caused by the gross negligence or
willful misconduct of such indemnified party as determined by a final judgment
of a court of competent jurisdiction). The obligations of the Borrower under
this Section 5.11(d) shall survive the Facility Termination Date, the
termination of this Credit Agreement, the payment of the Obligations and the
expiration, termination and/or cancellation of the Letters of Credit hereunder
indefinitely.
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SECTION 5.12 Subsidiaries. Deliver to the Administrative Agent
reasonably promptly after formation or acquisition of any new domestic
Subsidiary (but in any event prior to commencement of operations by such
Subsidiary), an Instrument of Assumption and Joinder executed by such
Subsidiary, appropriate UCC-1 financing statements, Mortgages and/or other
security documents, organizational documents and written opinions of counsel,
all as may be reasonably requested by any of the Agents or their counsel and all
in form and substance reasonably satisfactory to the Agents and their counsel
and if applicable, certificates or other instruments (if any) representing 100%
of the stock or other equity interests of such Subsidiary and of any direct
domestic Subsidiary of such Subsidiary (or, in the case of foreign Subsidiaries
which are owned by such new Subisidiary, 65% of the issued and outstanding stock
or other equity interests of such foreign Subsidiary to the extent that a higher
percentage would have a material adverse tax impact on a Credit Party), together
with an undated stock power (or other appropriate document) executed in blank
for each such certificate or other instrument.
SECTION 5.13 Lease Agreements. From time to time (i) furnish to
the Administrative Agent such information and reports regarding any lease
agreement with respect to a Real Property Asset to which a Credit Party or any
Subsidiary thereof is a party as the Administrative Agent may reasonably request
and (ii) upon the occurrence and continuation of an Event of Default and the
reasonable request of the Administrative Agent, make such demands and requests
for information, reports or action to the other parties to a lease agreement to
which a Credit Party or any Subsidiary thereof is a party, as the Credit Party
or Subsidiary is entitled to make under each such lease agreement.
SECTION 5.14 After-Acquired Real Property Assets. If, after the
Closing Date, any Credit Party purchases, leases or otherwise acquires any Real
Property Asset, (a) promptly, but in any event within thirty (30) days after
such purchase, lease or acquisition, provide written notice thereof to the
Administrative Agent and the Collateral Agent, setting forth with specificity a
description of such Real Property Asset acquired and (b) if either of the Agents
so requests, the applicable Credit Party shall promptly execute and deliver to
the Collateral Agent, a Mortgage and such other documents or instruments as such
Agent shall reasonably request with respect to such Real Property Asset.
SECTION 5.15 Lender Meetings. From time to time as requested by
the Administrative Agent or the Required Lenders, participate in, and cause an
Authorized Officer of the Borrower to be available for and to participate in, a
meeting of Lenders to be held, at reasonable intervals, at locations and at
times reasonably requested by the Administrative Agent (or, if applicable, the
Required Lenders).
SECTION 5.16 Cash Management System. At all times maintain or
cause to be maintained an integrated cash management system in accordance with
the terms of Section 8.3 hereof, including, without limitation, the delivery of
any Account Control Agreements reasonably requested by the Collateral Agent
pursuant to Section 8.3 hereof.
77
SECTION 5.17 Subordination, Non-Disturbance and Attornment
Agreements, Etc. (a) Use all commercially reasonable efforts to deliver to the
Collateral Agent as soon as reasonably practicable after the Closing Date,
executed and acknowledged subordination, non-disturbance and attornment
agreements and estoppel certificates, in form and substance reasonably
satisfactory to the Collateral Agent and the Borrower, with respect to all
leases reasonably designated by the Collateral Agent encumbering the Real
Property Assets and which by their terms are not subject and subordinate to the
Mortgages; provided, that commercially reasonable efforts shall not be construed
as requiring payment of any consent fee or other consideration for any third
party's execution and delivery of any such agreement.
(b) Use all commercially reasonable efforts to deliver to the
Collateral Agent as soon as reasonably practicable after the Closing Date, such
other certificates, documents and agreements respecting any Real Property Asset
leased by Borrower or any of its Subsidiaries as lessee, as the Collateral Agent
may, in its sole discretion, request (including, but not limited to, estoppel
certificates from lessors under any such lease, consents from lessors under any
such lease, modifications of any such lease to incorporate customary leasehold
financing provisions, a recordable memorandum of any such lease, and a
non-disturbance agreement from the holder of each mortgage covering the real
property demised by any such lease); provided, that commercially reasonable
efforts shall not be construed as requiring payment of any consent fee or other
consideration for any third party's execution and delivery of any such
agreement.
SECTION 5.18 ERISA Plan Compliance and Reports. Furnish to the
Administrative Agent (i) as soon as possible, and in any event within thirty
(30) days after any executive officer of a Credit Party has knowledge that (A)
any Reportable Event with respect to any Plan has occurred, a statement of an
executive officer of the Credit Party, setting forth on behalf of such Credit
Party details as to such Reportable Event and the action which it proposes to
take with respect thereto, together with a copy of the notice, if any, required
to be filed of such Reportable Event given to the PBGC or (B) an accumulated
funding deficiency has been incurred or an application has been made to the
Secretary of the Treasury for a waiver or modification of the minimum funding
standard or an extension of any amortization period under Section 412 of the
Code with respect to a Plan or Multiemployer Plan has been or is proposed to be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA, proceedings have been instituted to terminate a Plan if such Plan is
subject to Title IV of ERISA, an action has been instituted pursuant to Section
515 of ERISA to collect a delinquent contribution to a Multiemployer Plan, or
any such Credit Party or ERISA Affiliate will incur any liability to or on
account of the termination of or withdrawal from a Plan subject to Title IV of
ERISA or Multiemployer Plan under Sections 4062, 4063, 4201 or 4204 of ERISA, a
statement of an executive officer of the Credit Party, setting forth details as
to such event and the action the applicable Credit Party proposes to take with
respect thereto, (ii) promptly upon reasonable request of the Administrative
Agent, copies of each annual and other report with respect to each Plan and
(iii) promptly after receipt thereof, a copy of any notice any Credit Party or
ERISA Affiliate may receive from the PBGC relating to the PBGC's intention to
terminate any Plan subject to Title IV of ERISA or to appoint a trustee to
administer any Plan subject to Title IV of ERISA.
78
SECTION 5.19 Leases. Deliver to the Administrative Agent or the
Collateral Agent, no later than thirty days after the Closing Date, certified
true and complete copies of all material leases encumbering the Real Property
Assets.
SECTION 5.20 Post Closing Matters. (a) The parties hereto
acknowledge that delivery of the items specified in Section 4.1(c) and 4.1(g)
solely with respect to the Real Property Assets described on Schedule 5.20 (the
"Ancillary Real Property Assets") shall not be conditions precedent to the
effectiveness of this Credit Agreement. The Borrower shall or shall cause the
applicable Credit Party to, on or prior to the day which is forty-five (45) days
after the Closing Date, comply with the conditions set forth in each such
Section with respect to the Ancillary Real Property Assets. Additionally, prior
to the expiration of such forty-five (45) day period, the Borrower or the
applicable Credit Parties shall have complied with the conditions specified in
Sections 4.1(i), 4.1(j) and 4.1(k), to the extent such conditions are reasonably
required by the Collateral Agent.
(b) Within forty-five (45) days of the Closing Date, the
Collateral Agent shall use its best efforts to deliver, and the Borrower hereby
authorizes the Collateral Agent to record, at the Borrower's sole expense, an
executed release of each recorded mortgage lien and filed fixture filing made in
favor of Wachovia (as successor in interest to Wachovia Bank, N.A.), in its
capacity as administrative agent under that certain Credit Agreement dated as of
May 26, 2000, as amended, among Borrower, the guarantors party thereto, the
lenders party thereto, Wachovia Bank, National Association (as successor in
interest to Wachovia Bank, N.A. and First Union National Bank), as
administrative agent and as syndication agent and Bank One, NA as documentation
agent; provided that the failure by the Administrative Agent to execute and
deliver such releases shall not constitute a breach of its obligations hereunder
nor create any liability against the Collateral Agent hereunder.
(c) Within ten (10) Business Days of the Closing Date, the
Collateral Agent shall use its best efforts to either (i) confirm to the
Borrower that it is in possession of all stock certificates representing the
Pledged Securities or (ii) deliver to the Borrower an affidavit of lost stock
certificate, in form and substance reasonably acceptable to the Borrower, for
any stock certificate representing any of the Pledged Securities which the
Administrative Agent does not currently possess. The Borrower hereby agrees that
it will reissue and deliver to the Administrative Agent within thirty (30)
Business Days (subject to any delays reasonably caused by compliance with any
applicable foreign law and otherwise consented to by the Collateral Agent)
replacement stock certificates for any Pledged Securities identified by the
Administrative Agent under clause (ii) above; provided that the failure by the
Collateral Agent to confirm its possession of such certificates or to execute
and deliver such affidavits shall not constitute a breach of its obligations
hereunder nor create any liability against the Collateral Agent hereunder.
79
6. NEGATIVE COVENANTS
From the date hereof and for so long as any Commitments shall be
in effect, any amount remains outstanding with respect to any Loan, any Letter
of Credit shall remain outstanding (or not cash collateralized in an amount
equal to 105% of the then current L/C Exposure) or any Obligation remains unpaid
or unsatisfied, each Credit Party agrees that, unless the Required Lenders shall
otherwise consent in writing, it will not, and will not permit any of its
Subsidiaries (in the case of Sections 6.1, 6.2, 6.3, 6.4, 6.5 and 6.21) to:
SECTION 6.1 Limitations on Indebtedness and Preferred Stock.
Incur, create, assume or suffer to exist any Preferred Stock or Indebtedness,
other than:
(a) the Indebtedness and other Obligations under this Credit
Agreement, and any Indebtedness refinancing all or any portion of the
Indebtedness and/or other Obligations under this Credit Agreement; provided,
that the terms of any Indebtedness refinancing only a portion of the
Indebtedness and other Obligations under this Credit Agreement shall have been
approved in writing by the Administrative Agent and the Required Lenders;
(b) existing Indebtedness described on Schedule 6.1 hereto, but
not any extensions or renewals or refinancings thereof unless effected on
substantially the same terms or terms more favorable to the applicable Credit
Party or Subsidiary thereof which is the obligor of such Indebtedness;
(c) Indebtedness in respect of intercompany advances constituting
Investments permitted under Section 6.4 hereof;
(d) Indebtedness in respect of secured purchase money financing
(including Capital Leases), to the extent permitted by Section 6.2(e) hereof;
(e) Indebtedness incurred under Interest Rate Protection
Agreements or for bona fide hedging purposes; provided that the Administrative
Agent has previously consented to the form and substance of such agreements
(such consent not to be unreasonably withheld or delayed);
(f) Indebtedness of a Person which becomes a Subsidiary of a
Credit Party after the Closing Date; provided, that (i) such Indebtedness
existed at the time the Person became a Subsidiary and was not created in
anticipation of the acquisition of such Person, (ii) immediately after giving
effect to the acquisition of such Person by a Credit Party, no Default or Event
of Default shall have occurred and be continuing and (iii) such Indebtedness is
non-recourse to the Borrower or any other Credit Party (other than such Person
and its Subsidiaries to the extent such Indebtedness was with recourse to such
Subsidiaries at the time such Person became a Subsidiary of a Credit Party);
(g) Indebtedness secured by any asset at the time of acquisition
of such asset by a Credit Party or a Subsidiary of a Credit Party (not in
violation of any of the terms hereof) at any time after the Closing Date;
provided, that (i) such Indebtedness existed at the time the asset was acquired
80
by a Credit Party and was not created in anticipation of the acquisition
thereof, (ii) such Indebtedness is non-recourse to the Borrower or any other
Credit Party (other than to the specific asset acquired) and (iii) the aggregate
principal amount of Indebtedness of all of the Credit Parties and their
Subsidiaries permitted by this Section 6.1(g) shall not exceed $1,000,000 at any
time;
(h) Guarantees permitted pursuant to Section 6.3 hereof;
(i) The Notes and any refinancings thereof on terms and
conditions satisfactory to the Administrative Agent and no less favorable to the
Lenders;
(j) Indebtedness owed to any factor in connection with the
factoring of Accounts which in the case of any Credit Party or its domestic
Subsidiaries shall not have an aggregate face amount outstanding for all Credit
Parties and their domestic Subsidiaries at any time exceeding $10,000,000;
provided, however that on or prior to October 15, 2002, the Credit Parties and
their domestic Subsidiaries may incur such Indebtedness in an aggregate amount
of up to $14,600,000; and
(k) Indebtedness incurred by a foreign Subsidiary consisting of
(i) any Capital Lease, (ii) any other Indebtedness to a Person which is not
affiliated with the Credit Parties (other than any Lender) or any Subsidiaries
which is not secured by any of the Collateral and which is not recourse to any
of the Credit Parties, (iii) any transaction pursuant to which any foreign
Subsidiary sells any property or other asset to another Person and then leases
back such property or other asset not located in any state or territory of the
United States of America or the District of Columbia from such other Person and
the lessor obtains no interest in any assets of any of the Credit Parties or any
Subsidiary, other than the property or assets leased pursuant thereto, (iv)
Indebtedness not otherwise permitted under this Section 6.1, (v) other
Indebtedness reasonably acceptable to the Administrative Agent, (vi)
Indebtedness of the type described in clauses (f), (h) or (j) of this Section
6.1 (provided that the Indebtedness incurred under clauses (i) through (vi) of
this subsection shall not exceed $5,000,000 in the aggregate outstanding at any
one time) and (vii) Indebtedness existing on the date hereof and described on
Schedule 6.1, but not any renewals or extensions or refinancings thereof unless
(1) the principal amount thereof is not increased in connection with such
renewal, extension or refinancing and (2) such renewal, extension or refinancing
is effected on substantially the same terms or terms more favorable to such
foreign Subsidiary which is the Obligor thereof.
SECTION 6.2 Limitations on Liens. Incur, create, assume or suffer
to exist any Lien on any of its revenue stream, property or assets, whether now
owned or hereafter acquired, except:
(a) deposits under worker's compensation, unemployment insurance
and social security and similar laws or to secure statutory obligations or
surety, appeal, performance, completion or other similar bonds, to secure
performance as lessee under leases of real or personal property or to secure
performance of tenders, bids, contracts (other than for the repayment of
Indebtedness) and other obligations of a like nature, in each case incurred in
the ordinary course of business;
81
(b) Liens customarily granted or incurred in the ordinary course of business
with regard to services rendered by carriers, warehouses, suppliers of materials
and equipment, mechanics and repairmen and other Liens imposed by Applicable Law
which obligations are not yet due and payable (unless such obligations are being
contested in good faith and with respect to which appropriate reserves have been
established in accordance with GAAP);
(c) the Liens in favor of the Collateral Agent (for the benefit
of the Secured Parties) under this Credit Agreement, the other Fundamental
Documents and any other document contemplated hereby or thereby;
(d) existing Liens listed on Schedule 6.2(d) hereto;
(e) Liens granted to a Person financing the acquisition of
property, plant or equipment if (i) the Lien is limited to the particular assets
acquired; (ii) the Indebtedness secured by the Lien does not exceed the
acquisition cost of the particular asset for which such Lien is granted; (iii)
such transaction does not otherwise violate this Credit Agreement; and (iv) the
aggregate amount of all Indebtedness incurred after the date hereof secured by
such Liens does not exceed $5,000,000 at any one time outstanding for all of the
Credit Parties and their Subsidiaries;
(f) Liens arising out of attachments, judgments or awards as to
which an appeal or other appropriate proceedings for contest or review are
timely commenced (and as to which foreclosure and other enforcement proceedings
shall not have been commenced (unless fully bonded or otherwise effectively
stayed)) and as to which appropriate reserves have been established in
accordance with GAAP;
(g) Liens for taxes, assessments or other governmental charges or
levies not yet due and payable, or the validity or amount of which is currently
being contested in good faith by appropriate proceedings and for which reserves
have been set aside on the books of the applicable Credit Party or Subsidiary,
in each case pursuant to and in accordance with the terms of Section 5.8 hereof;
(h) financing statements filed in connection with a Capital Lease
or an operating lease, in each case not prohibited hereunder; provided, that no
such financing statement extends, covers or refers to any property or assets of
a Credit Party or a Subsidiary thereof, other than the property or assets which
are subject to such Capital Lease or such operating lease;
(i) easements (including, without limitation, reciprocal easement
agreements and utility agreements), rights of way requirements, restrictions
(including, without limitation, zoning restrictions), covenants, consents,
reservations, encroachments, variations and other similar restrictions, charges,
encumbrances (whether or not recorded) (but specifically excluding rights of
first refusal, options and other contractual rights to sell, assign or otherwise
dispose of any Real Property Asset or any interest therein) on any Real Property
Asset which, in the aggregate, (i) do not materially detract from the value of
the applicable Real Property Asset subject thereto, (ii) do not materially
interfere with the ordinary conduct of the business of the Credit Parties, any
Subsidiary of a Credit Party or any lessee under a lease or (iii) do not
materially impair the use of the applicable Real Property Asset by any Credit
Party, any Subsidiary of a Credit Party or any lessee under a lease;
82
(j) Liens on the property or assets of a Person which becomes a
Subsidiary of a Credit Party after the Closing Date securing Indebtedness
permitted under Section 6.1(g) hereof; provided, that (i) such Liens existed at
the time such Person became a Subsidiary and were not created in anticipation of
the acquisition of such Person, (ii) any such Lien does not by its terms cover
any property or assets after the time such Person becomes a Subsidiary which
were not covered immediately prior thereto and (iii) any such Lien does not by
its terms secure any Indebtedness other than Indebtedness existing immediately
prior to the time such Person becomes a Subsidiary;
(k) Liens arising by virtue of any statutory or common law
provision relating to banker's liens, rights of set off or similar rights with
respect to deposit accounts;
(l) Liens on assets at the time of acquisition of the asset by a
Credit Party or a Subsidiary thereof; provided, that (i) such Liens existed at
the time of such acquisition and were not created in anticipation of the
acquisition of such asset, (ii) any such Lien does not by its terms cover any
property or assets other than the asset acquired and (iii) any such Lien does
not by its terms secure any Indebtedness other than Indebtedness permitted
pursuant to Section 6.1(h);
(m) Liens securing refinancing Indebtedness permitted by Sections
6.1(b), (d), (g), (i) or (k); provided, that such Liens shall by their terms
cover only such property or assets as is covered by the Liens securing the
Indebtedness being refinanced and no new or additional property or assets and
any Liens granted with respect to such refinancing Indebtedness shall be
subordinated to at least the same extent as the existing Liens securing such
Indebtedness being refinanced;
(n) Liens incurred in the ordinary course of business with
respect to obligations that do not exceed $1,000,000 in the aggregate at any one
time outstanding and that are not incurred in connection with Indebtedness or
the obtaining of advances or credit (other than trade credit in the ordinary
course of business);
(o) Liens granted pursuant to the Subordinated Security Agreement
securing the Notes and the A-Advanced Guaranty which are subordinated to the
Liens of the Collateral Agent on terms and conditions satisfactory to the
Collateral Agent in its sole discretion;
(p) Liens in favor of a factor on, and in connection with, any
Accounts of any Credit Party or its respective domestic Subsidiaries actually
sold to such factor; provided, that the face amount of the Accounts securing
such Lien with respect to Accounts of any Credit Parties shall not exceed
$14,600,000 in the aggregate on or prior to October 15, 2002 and $10,000,000
thereafter; and
(q) Liens securing Indebtedness permitted under Section 6.1(k).
83
SECTION 6.3 Limitation on Guaranties. Incur, create, assume or
suffer to exist any Guaranty, either directly or indirectly, except:
(a) the endorsement of negotiable instruments for deposit or
collection in the ordinary course of business;
(b) the Guaranties made by the Guarantors pursuant to Article 9
hereof;
(c) Guaranties of obligations of a Credit Party which obligations
are not prohibited hereunder;
(d) Guaranties set forth on Schedule 6.1 hereto;
(e) Guaranties constituting Investments that are not prohibited
by Section 6.4;
(f) Guaranties by the Borrower of the obligations set forth on
Schedule 6.3(f) hereto or any refinancings thereof (provided that such
refinancings are on substantially the same terms or terms more favorable to the
applicable Credit Party or to the Subsidiary thereof which is the obligor under
such Guaranty);
(g) Guaranties by the Guarantors of the Notes (provided that such
Guaranties are subject to the terms of the Intercreditor Agreement); and
(h) the A-Advanced Guaranty (provided that such Guaranty is
subject to the terms of the Intercreditor Agreement).
SECTION 6.4 Limitations on Investments. Create, make or incur any
Investment, except:
(a) cash and Cash Equivalents;
(b) Investments (whether as equity or loans) by a Credit Party in
another Credit Party or a Person that immediately becomes a Credit Party;
(c) additional Investments received in settlement of Indebtedness
or other obligations created in the ordinary course of business and owing to any
Credit Party or a Subsidiary of a Credit Party;
(d) existing Investments listed on Schedule 6.4(d) hereto;
(e) Guaranties permitted by Section 6.3;
(f) travel expenses and other similar extensions of credit to
employees in the ordinary course of business not to exceed an aggregate of
$300,000 outstanding at any one time;
(g) Investments (whether as equity or loans) by a Subsidiary
which is not a Credit Party in the Borrower or another Subsidiary;
84
(h) Investments after the date hereof by a Credit Party in a
Subsidiary which is not a Credit Party, in the ordinary course of business
consistent with past practice not to exceed $3,000,000 in the aggregate at any
time; and
(i) Investments in Grupo Ambar S.A. de C.V. necessary to acquire
the 5% of the common stock therein not owned by the Borrower in the event the
owner of such 5% interest exercises a put right or the Borrower exercises a call
right pertaining thereto pursuant to that certain Shareholders' Agreement, dated
August 18, 1994, by and between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Cwilich and the Borrower, so
long as such Investments do not involve the payment of cash or cash equivalents
as part of the purchase price or consideration paid to such owner (other than
pursuant to a subordinated loan arrangement in which such loan is fully
subordinated in all respects to the Obligations, with no interest or principal
being payable thereunder until such time that all Obligations have been repaid
in full, all outstanding Letters of Credit have expired or have been terminated
and all Commitments have terminated).
SECTION 6.5 Restricted Payments. Pay, declare, make or become
obligated to make any Restricted Payment, except:
(a) the declaration and payment of dividends and/or distributions
by any direct or indirect wholly-owned Subsidiary of a Credit Party to a Credit
Party;
(b) to the extent permitted under Section 13.16 hereof, payments
with respect to intercompany Indebtedness, intercompany receivables or
intercompany advances constituting Investments permitted under Section 6.4
hereof; and
(c) the issuance by the Borrower of its capital stock to or
repurchase by the Borrower of its capital stock from any of its directors,
officers or employees pursuant to an executive compensation plan in form and
substance reasonably satisfactory to the Administrative Agent in its sole
discretion.
SECTION 6.6 Limitation on Leases. Create, incur or assume any
commitment to make, any direct or indirect payment, whether as rent or
otherwise, under any lease, rental or other arrangement for the use of real
property (excluding Capital Leases), excluding (i) leases existing on the date
hereof and any renewals thereof or replacements thereof effected on
substantially the same terms or terms more favorable to the applicable Credit
Party and (ii) any other leases hereafter entered into with an aggregate annual
rental not to exceed $2,000,000.
SECTION 6.7 Merger, Sale of Assets, Purchases, etc. (a) Whether
in one transaction or a series of transactions, wind up, liquidate or dissolve
its affairs, or enter into any transaction of merger or consolidation, or sell
or otherwise dispose of any capital stock of any Subsidiary of any Credit Party,
or any of its property, stock or assets or agree to do or suffer any of the
foregoing, except for:
85
(i) the merger by any solvent Subsidiary into the Borrower,
another Credit Party or, in the case of a Subsidiary which is not a Credit
Party, into another Subsidiary which is not a Credit Party, if after such
merger, no Default or Event of Default exists;
(ii) the transfer by any solvent Subsidiary of all of its assets
to the Borrower, another Credit Party or, in the case of a Subsidiary which is
not a Credit Party, to another Subsidiary which is not a Credit Party and the
subsequent dissolution of such solvent Subsidiary if after such transactions, no
Default or Event of Default exists;
(iii) sales or other dispositions of assets (other than Real
Property Assets) in the ordinary course of business;
(iv) sales or dispositions of assets for fair market value for
cash, the Net Cash Proceeds of which are either (x) applied as mandatory
prepayments of the Loans as required by Section 2.9(c) hereof or (y) within 90
days of such sale or disposition reinvested in the purchase of assets to be used
in the business of the Credit Parties so long as pending such reinvestment any
such Net Cash Proceeds are held in the Cash Collateral Account;
(v) the use of cash in the ordinary course of business, subject
to the provisions of this Credit Agreement;
(vi) the granting of Permitted Liens;
(vii) the transfers of assets constituting Investments permitted
by Section 6.4 or Restricted Payments permitted by Section 6.5;
(viii) the sale of Accounts in connection with a factoring
transaction permitted by Section 6.1(j) hereof; provided, however, that the
Credit Parties may not discriminate in determining which Accounts to sell to a
factor in a manner which is reasonably likely to have an adverse effect on the
aggregate value of the pool of Eligible Accounts Receivable retained by the
Credit Parties and pledged to the Collateral Agent hereunder;
(ix) the sale or other transfer of any assets (or proceeds
thereof) set forth on Schedule 2.9(c) by a Credit Party to the Discontinued
Operations Trust;
(x) the sale or dissolution of an inactive Subsidiary; and
(xi) the sale or other disposition and discontinuance of all of
the operations of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Texteis Iberica Limitada, including, but not
limited to all related transactions reasonably necessary to consummate the
discontinuance of such operations.
(b) Purchase or otherwise acquire all or substantially all of any
stock or asset of any other Person, except for:
(i) transactions contemplated by Sections 6.7(a)(i) and
6.7(a)(ii) above;
86
(ii) the creation of new Subsidiaries which, in the case of
domestic Subsidiaries, immediately become Guarantors to the extent required by
and in accordance with Section 5.12 hereof; and
(iii) Investments permitted by Section 6.4 hereof.
SECTION 6.8 Places of Business; Change of Name. Change the
location of its chief executive office or principal place of business or any of
the locations where it keeps any portion of the Collateral or its books and
records with respect to the Collateral, any Real Property Asset or Pledged
Securities, change its name, change its corporate structure, change its
jurisdiction of incorporation or organization, change its organization
identification number or obtain an organizational identification number if it
did not previously have one without in each case (i) giving the Administrative
Agent and the Collateral Agent thirty (30) days prior written notice of such
change and (ii) filing any additional Uniform Commercial Code financing
statements, and such other documents requested by either such Agent to maintain
perfection of the security interest of the Collateral Agent for the benefit of
the Secured Parties in the Collateral and in each Real Property Asset.
SECTION 6.9 Limitations on Capital Expenditures. (a) Make or
incur any obligation to make Capital Expenditures (including obligations under
Capital Leases) which in the aggregate for each of the fiscal years indicated
below exceed the amount set forth opposite such fiscal year:
Fiscal Year Amount (in millions)
----------- --------------------
2003 $14,000,000
2004 $14,500,000
2005 $14,500,000
(b) To the extent the amount of Capital Expenditures permitted by
the preceding paragraph (a) for any fiscal year (without regard to any
carry-over from a prior year pursuant to this paragraph) is in excess of the
actual amount of Capital Expenditures for such period, the amount of permitted
Capital Expenditures during the immediately succeeding fiscal year only, shall
be increased by the lesser of (i) the amount of such excess and (ii) $3,000,000
for the period with respect to which such excess exists.
SECTION 6.10 Minimum Consolidated EBITDA. For each Rolling Four
Quarters period ending on the dates indicated below, permit Consolidated EBITDA
to be less than the corresponding amount set forth below; provided that (i) with
respect to the first quarter of the Borrower's fiscal year 2003, Consolidated
EBITDA will be determined for such quarter on an annualized basis, (ii) with
respect to the second quarter of the Borrower's fiscal year 2003, Consolidated
EBITDA will be determined for the first two fiscal quarters of such fiscal year
on an annualized basis and (iii) with respect to the third quarter of the
Borrower's fiscal year 2003, Consolidated EBITDA will be determined for the
first three fiscal quarters of such fiscal year on an annualized basis:
87
Period Ending Last
Day of Fiscal Quarter Amount (in millions)
--------------------- --------------------
FQ1 2003 $32,000,000
FQ2 2003 $36,000,000
FQ3 2003 $38,000,000
FQ4 2003 $36,500,000
FQ1 2004 $38,000,000
FQ2 2004 $39,000,000
FQ3 2004 $40,000,000
FQ4 2004 $42,500,000
FQ1 2005 $42,500,000
FQ2 2005 $42,500,000
FQ3 2005 $42,500,000
FQ4 2005 $42,500,000
SECTION 6.11 Maximum Total Leverage Ratio. For each Rolling Four Quarters period
ending on the dates indicated below, permit the Total Leverage Ratio to be more
than the corresponding ratio set forth below (provided, that during the first
three fiscal quarters of fiscal year 2003, the Total Leverage Ratio shall be
calculated as set forth in the proviso to the definition thereof):
Period Ending Last
Day of Fiscal Quarter Ratio
--------------------- -----
FQ1 2003 4.80:1
FQ2 2003 4.35:1
FQ3 2003 4.10:1
FQ4 2003 4.15:1
FQ1 2004 4.15:1
FQ2 2004 4.10:1
FQ3 2004 4.10:1
FQ4 2004 3.55:1
FQ1 2005 3.55:1
FQ2 2005 3.55:1
FQ3 2005 3.55:1
FQ4 2005 3.55:1
SECTION 6.12 Minimum Consolidated Fixed Charge Coverage Ratio. For each Rolling
Four Quarters period ending on the dates indicated below, permit the
Consolidated Fixed Charge Coverage Ratio to be less than the corresponding ratio
set forth below (provided, that during the first three fiscal quarters of fiscal
year 2003, the Consolidated Fixed Charge Coverage Ratio shall be calculated as
set forth in the proviso to the definition thereof):
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Period Ending Last
Day of Fiscal Quarter Ratio
--------------------- -----
FQ1 2003 1.15:1
FQ2 2003 1.25:1
FQ3 2003 1.35:1
FQ4 2003 1.30:1
FQ1 2004 1.30:1
FQ2 2004 1.35:1
FQ3 2004 1.35:1
FQ4 2004 1.45:1
FQ1 2005 1.45:1
FQ2 2005 1.45:1
FQ3 2005 1.45:1
FQ4 2005 1.45:1
SECTION 6.13 Minimum Consolidated Tangible Net Worth. Permit
Consolidated Tangible Net Worth at any time to be less than:
(i) at the close of the first fiscal quarter of 2003, the amount
of Consolidated Tangible Net Worth set forth in the audited financial statements
delivered by the Credit Parties pursuant to Section 5.1(a) (as adjusted to give
effect to the transactions contemplated by the Plan of Reorganization) minus
$3,700,000;
(ii) at the end of the second fiscal quarter of 2003, the amount
set forth in clause (i) minus $1,700,000;
(iii) at the end of the third fiscal quarter of 2003, the amount
set forth in clause (ii) minus $1,400,000;
(iv) at the end of the fourth fiscal quarter of 2003, the amount
set forth in clause (iii) minus $1,400,000;
(v) at the end of the first fiscal quarter of 2004, the amount
set forth in clause (iv) minus $1,800,000;
(vi) at the end of the second fiscal quarter of 2004, the amount
set forth in clause (v) minus $1,900,000;
(vii) at the end of the third fiscal quarter of 2004, the amount
set forth in clause (vi) minus $100,000; and
(viii) at the end of the fourth fiscal quarter of 2004, and for
each fiscal quarter thereafter, the amount set forth in clause (vii) minus
$1,800,000.
SECTION 6.14 Transactions with Affiliates. Enter into any
transaction with, or make any payment to, any of its Affiliates that is less
favorable to such Credit Party or of any such Credit Party's Subsidiaries than
would have been the case if such transaction had been effected on an arms-length
basis with a Person other than an Affiliate except that (a) the Borrower may
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enter into such transactions with its Subsidiaries, (b) Subsidiaries of the
Borrower may enter into transactions with other Subsidiaries of the Borrower and
(c) the Borrower may enter into such transactions with the Altamira Trust and
the Discontinued Operations Trust.
SECTION 6.15 Business Activities. Engage in any business
activities other than the production and sale of fabric, specialty fiber and
yarns and businesses related thereto.
SECTION 6.16 Joint Ventures or Partnerships. Enter into any Joint
Venture or partnership (including, without limitation, by way of selling the
capital stock or other equity interests of a Subsidiary) unless (a) any interest
received by a Credit Party in such domestic Joint Venture or partnership is
pledged to the Collateral Agent (for the benefit of the Secured Parties)
pursuant hereto and (b) the Borrower shall have prepaid the Loans hereunder as
required by Section 2.9(e) hereof to the extent that a Credit Party receives any
Net Cash Proceeds therefrom.
SECTION 6.17 Eligible Account Receivables. Sell, discount or
otherwise dispose of Accounts owing to any Credit Party or any Subsidiary of a
Credit Party except (i) for purposes of collection in the ordinary course of
business, (ii) in connection with the sale of the related Credit Party,
Subsidiary or Real Property Asset to the extent not prohibited under Section 6.7
hereof or (iii) in connection with any factoring arrangement permitted under
Section 6.1(j) hereof.
SECTION 6.18 Sale and Leaseback. Enter into any arrangement with
any Person or Persons, whereby in contemporaneous transactions any Credit Party
or any Subsidiary of a Credit Party sells essentially all of its right, title
and interest in an asset and, in connection therewith, acquires, leases or
licenses back the right to use such asset; other than with respect to the sale
and leaseback of the IFD Building, located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
SECTION 6.19 Changes to Credit and Collection Policy and Material
Agreements.
(a) Make any material change in its Credit and Collection Policy
which in the reasonable opinion of the Collateral Agent would adversely affect
the collection of Accounts.
(b) Consent to any modification or waiver of any material
agreement listed on Schedule 3.17(b) hereto if such modification or waiver would
have a Material Adverse Effect with respect to the Credit Parties. The Borrower
will not consent to the assignment by any other party to any material agreement
of any rights, obligations or interests of such party thereunder except as
expressly permitted by any such material agreement.
(c) Amend the articles of incorporation or by-laws of any Credit
Party in any manner which could be reasonably expected to have a Material
Adverse Effect.
(d) Except to the extent permitted under the Intercreditor
Agreement, make any material amendment or modification to the Note Agreement
without the prior written consent of Required Lenders.
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SECTION 6.20 ERISA Compliance. Engage in a "prohibited
transaction," as defined in Section 406 of ERISA or Section 4975 of the Code,
with respect to any Plan or Multiemployer Plan or knowingly consent to any
"party in interest" or any "disqualified person", as such terms are defined in
Section 3(14) or ERISA and Section 4975(e)(2) of the Code, respectively,
engaging in any "prohibited transaction", with respect to any Plan or
Multiemployer Plan; or permit any Plan to incur any "accumulated funding
deficiency", as defined in Section 302 of ERISA or Section 412 of the Code; or
terminate any Plan in a manner which could result in the imposition of a Lien on
any property of any Credit Party, any Subsidiary of a Credit Party or any ERISA
Affiliate pursuant to Section 4068 of ERISA; or breach or knowingly permit any
employee or officer or any trustee or administrator of any Plan to breach any
fiduciary responsibility imposed under Title I of ERISA with respect to any
Plan; engage in any transaction which would result in the incurrence of a
liability under Section 4069 of ERISA; or fail to make contributions to a Plan
or Multiemployer Plan which could result in the imposition of a Lien on any
property of any Credit Party, any Subsidiary of a Credit Party or any ERISA
Affiliate pursuant to Section 302(f) of ERISA or Section 412(n) of the Code, if
the occurrence of any of the foregoing events (alone or in the aggregate) would
result in a liability which has a Material Adverse Effect.
SECTION 6.21 Hazardous Materials. Cause or permit any of its
properties or assets to be used to generate, manufacture, refine, transport,
treat, store, handle, dispose, transfer, produce or process Hazardous Materials,
except in material compliance with all applicable Environmental Laws; nor
release, discharge, dispose of or permit or suffer any release or disposal as a
result of any intentional act or omission on its part of Hazardous Materials
onto any such property or asset in violation of any Environmental Law or in a
manner that could result in liability under any Environmental Law, except as are
not reasonably likely to have a Material Adverse Effect.
SECTION 6.22 Use of Proceeds of Loans.
(a) Use the proceeds of Loans hereunder other than for the
purposes set forth in, and as required by, Section 2.1(b) hereof.
(b) Use, directly or indirectly, the proceeds of any Loan
hereunder for the purpose (whether immediate, incidental or ultimate) of buying
or carrying any Margin Stock.
SECTION 6.23 Fiscal Year; Fiscal Quarter. Change its fiscal year
or any of its fiscal quarters without the consent of the Required Lenders.
SECTION 6.24 Liquidity. Permit the sum of (i) cash on hand
(including cash equivalents) of the Credit Parties plus (ii) Unused Availability
to be less than $5,000,000.
7. EVENTS OF DEFAULT
In the case of the happening and during the continuance of any of
the following events (herein called "Events of Default"):
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(a) any representation, warranty, certification or statement made
by a Credit Party in this Credit Agreement or any other Fundamental Document to
which it is a party or in connection with this Credit Agreement or any
Fundamental Document or any statement or representation made by or on behalf of
any Credit Party in any report, financial statement, certificate or other
document furnished to either of the Agents, the Issuing Bank, any Lender or any
other Secured Party pursuant to, or in connection with, this Credit Agreement or
any other Fundamental Document, shall prove to have been false or misleading in
any material respect when made or delivered;
(b) default shall be made in the payment of principal of any of
the Loans as and when due and payable, whether at the due date thereof, by
reason of maturity, mandatory prepayment, acceleration or otherwise;
(c) default shall be made in the payment of interest on the
Loans, the Fees, the Letter of Credit Fees or other amounts payable to any of
the Agents, the Issuing Bank or a Lender under this Credit Agreement or under
the fee letter with respect to any Letter of Credit or under any of the Fee
Letters, when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise and such default shall continue unremedied for two (2)
Business Days;
(d) default shall be made in the due observance or performance of
any covenant, condition or agreement contained in Sections 5.1 (except as set
forth in the immediately following clause (e)), 5.4(a), 5.5(a), 5.18 or Article
6 of this Credit Agreement or Section 25(a) of Article I of any Mortgage, or any
event described in Section 5 or 6 of Article II of any Mortgage shall occur;
(e) default shall be made in the due observance or performance of
any covenant, condition or agreement contained in Section 5.1(f), (g), (k), (l)
or (m), and such default shall continue unremedied for ten (10) days after a
Credit Party receives written notice or obtains knowledge of such occurrence
(provided that so long as a default with respect to Section 5.1(k) is
continuing, the Lenders shall not be obligated to make any further Loans
hereunder until such default has been cured);
(f) default shall be made by any Credit Party in the due
observance or performance of any other covenant, condition or agreement to be
observed or performed pursuant to the terms of this Credit Agreement or any
other Fundamental Document (other than those covered by paragraphs (a), (b),
(c), (d) or (e) of this Article 7), and such default shall continue unremedied
for thirty (30) days after a Credit Party receives written notice or obtains
knowledge of such occurrence;
(g) default shall be made with respect to payment of interest or
principal on the Notes or any other "event of default" (as defined in the Note
Agreement) shall occur under the Note Agreement;
(h) any "default" (as defined in the A-Advanced Guaranty) by the
Borrower shall occur and be continuing under the A-Advanced Guaranty or an
"event of default" (as defined in the Subordinated Security Agreement) shall
occur and be continuing under the Subordinated Security Agreement;
92
(i) default shall be made and be continuing by a Credit Party
with respect to its obligations under a factoring agreement permitted under
Section 6.1(j) hereof;
(j) default shall be made with respect to any payment, when due,
of any Indebtedness in excess of $2,000,000 (other than the Obligations, the
Notes and the notes issued by the Altamira Trust) of any Credit Party or any
Subsidiary of a Credit Party, or any other default shall occur, if the effect of
such non-payment default is to accelerate the maturity of such Indebtedness or
to permit the holder thereof to cause such Indebtedness to become due prior to
its stated maturity, and such default shall not be remedied, cured, waived or
consented to within the period of grace with respect thereto, or any other
circumstance which arises (other than the mere passage of time) by reason of
which any Credit Party or any Subsidiary of a Credit Party (as applicable) is
required to repurchase or offer to holders of such Indebtedness of any such
Person, the opportunity to have repurchased, any such Indebtedness; or any such
Indebtedness shall become or be declared to be due and payable prior to its
stated maturity;
(k) any Credit Party or any Subsidiary of a Credit Party (other
than a Subsidiary that is an Altamira Trust Asset) shall generally not pay its
debts as they become due or shall admit in writing its inability to pay its
debts, or shall make a general assignment for the benefit of creditors; or any
Credit Party or any Subsidiary of a Credit Party shall commence any case,
proceeding or other action seeking to have an order for relief entered on its
behalf as a debtor or to adjudicate it a bankrupt or insolvent or seeking
reorganization, arrangement, adjustment, liquidation, dissolution or composition
of it or its debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors or seeking appointment of a receiver,
trustee, custodian or other similar official for it or for all or any
substantial part of its property or shall file an answer or other pleading in
any such case, proceeding or other action admitting the material allegations of
any petition, complaint or similar pleading filed against it or consenting to
the relief sought therein; or any Credit Party or any Subsidiary of a Credit
Party shall take any action to authorize, or in contemplation of, any of the
foregoing;
(l) any involuntary case, proceeding or other action against any
Credit Party or any Subsidiary of a Credit Party (other than a Subsidiary that
is an Altamira Trust Asset) shall be commenced seeking to have an order for
relief entered against it as debtor or to adjudicate it a bankrupt or insolvent,
or seeking reorganization, arrangement, adjustment, liquidation, dissolution or
composition of it or its debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, or seeking appointment of a receiver,
trustee, custodian or other similar official for it or for all or any
substantial part of its property, and such case, proceeding or other action (i)
results in the entry of any order for relief against it or (ii) shall remain
undismissed for a period of sixty (60) days;
(m) one or more judgment(s) for the payment of money in excess of
$1,000,000 in the aggregate (other than a judgment as to which, and only to the
extent, a reputable insurance company has acknowledged coverage of such claim in
writing) shall be rendered against any Credit Party or any Subsidiary of a
Credit Party (other than a Subsidiary that is an Altamira Trust Asset) and
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either (i) within thirty (30) days from the entry of such judgment, shall not
have been discharged or stayed pending appeal, or shall not have been discharged
within thirty (30) days from the entry of a final order of affirmance on appeal
or (ii) enforcement proceedings shall be commenced by any creditor on any such
judgment;
(n) (i) failure by any Credit Party or ERISA Affiliate to make
any contributions required to be made to a Plan subject to Title IV of ERISA or
a Multiemployer Plan, (ii) any accumulated funding deficiency (within the
meaning of Section 4971(c) of the Code) shall exist with respect to any Plan
(whether or not waived), (iii) failure by any Plan to satisfy the minimum
funding standard required for any plan year or part thereof under Section 412 of
the Code or Section 302 of ERISA or a waiver of such standard or an extension of
any amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, (iv) any Credit Party or ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred
withdrawal liability to such Multiemployer Plan, or that a Multiemployer Plan is
in reorganization or is being terminated, (v) a Reportable Event with respect to
a Plan shall have occurred, (vi) the withdrawal by any Credit Party or ERISA
Affiliate from a Plan during a plan year in which it was a substantial employer
(within the meaning of Section 4001(a)(2) or 4062(e) of ERISA), (vii) the
termination of a Plan, or the filing of a notice of intent to terminate a Plan
under Section 4041(c) of ERISA, (viii) the institution of proceedings to
terminate, or the appointment of a trustee with respect to, a Plan by the PBGC,
(ix) any other event or condition which could constitute grounds under Section
4042(a) of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or (x) the imposition of a Lien pursuant to Section 412 of
the Code or Section 302 of ERISA as to any Credit Party or ERISA Affiliate; and
the occurrence of any of the foregoing events, individually or in the aggregate,
could reasonably be expected to result in a liability in excess of $1,000,000;
(o) any Credit Party or any Subsidiary of any Credit Party is
liable for a violation of or liability under any Environmental Law which is
reasonably likely to have a Material Adverse Effect;
(p) (i) this Credit Agreement, any Mortgage, or any other
Fundamental Document shall, for any reason, not be or shall cease to be in full
force and effect or shall be declared null and void or any of the Fundamental
Documents shall not give or shall cease to give the Collateral Agent the Liens,
rights, powers and privileges purported to be created thereby in favor of the
Collateral Agent for the benefit of the Secured Parties, superior to and prior
to the rights of all third Persons and subject to no other Liens (other than
Permitted Liens), or (ii) the validity or enforceability of the Liens granted,
to be granted, or purported to be granted, by any of the Fundamental Documents
shall be contested by any Credit Party or any of their respective Subsidiaries;
(q) a Change in Control shall occur and shall not have been
consented to by the Required Lenders;
(r) at any time, for any reason, any Credit Party shall
repudiate, or seek to repudiate, any of its Obligations under any Fundamental
Document to which it is a party;
94
then, in every such event and at any time thereafter during the continuance of
such event, the Administrative Agent may, and if directed by the Required
Lenders shall, take any or all of the following actions, at the same or
different times: (x) terminate forthwith the Commitments and/or (y) declare the
principal of and the interest on the Loans and the notes evidencing the Loans
hereunder and all other amounts payable hereunder or thereunder to be forthwith
due and payable, whereupon the same shall become and be forthwith due and
payable, without presentment, demand, protest, notice of acceleration or other
notice of any kind, all of which are hereby expressly waived, anything in this
Credit Agreement or in any note evidencing any Loan hereunder to the contrary
notwithstanding and/or (z) require the Borrower to deliver to the Administrative
Agent from time to time cash or Cash Equivalents in an amount equal to 105% of
the amount of the L/C Exposure or to furnish other security therefor acceptable
to the Issuing Bank and the Required Lenders. If an Event of Default specified
in paragraphs (h) or (i) above shall have occurred, the Commitments shall
automatically terminate and the principal of, and interest on, the Loans and the
notes evidencing the Loans hereunder and all other amounts payable hereunder and
thereunder shall automatically become due and payable without presentment,
demand, protest, or other notice of any kind, all of which are hereby expressly
waived, anything in this Credit Agreement or any note evidencing any Loan
hereunder to the contrary notwithstanding. Such remedies shall be in addition to
any other remedy available to any of the Secured Parties pursuant to Applicable
Law or otherwise.
8. GRANT OF SECURITY INTEREST; REMEDIES
SECTION 8.1 Security Interests. The Borrower, as security for the
due and punctual payment of the Obligations (including interest accruing on and
after the filing of any petition in bankruptcy or of reorganization of the
Borrower whether or not post filing interest is allowed in such proceeding) and
each of the Guarantors, as security for its obligations under Article 9 hereof,
hereby mortgage, pledge, assign, transfer, set over, convey and deliver to the
Collateral Agent (for the benefit of the Secured Parties) and grant to the
Collateral Agent (for the benefit of the Secured Parties) a security interest in
the Collateral.
SECTION 8.2 Use of Collateral. So long as no Event of Default
shall have occurred and be continuing, and subject to the various provisions of
this Credit Agreement and the other Fundamental Documents, a Credit Party may
use the Collateral in any lawful manner except as otherwise provided hereunder.
SECTION 8.3 Cash Management System.
(a) The Credit Parties shall at all times maintain a cash
management system reasonably acceptable to the Collateral Agent which shall
include, without limitation, maintaining at all times all Concentration Accounts
with either of the Agents or a Lender.
(b) The Credit Parties shall cause all funds arising from the
collection of Eligible Account Receivables to be deposited in one or more of the
Concentration Accounts set forth on Schedule 8.3(b) hereto.
95
(c) So long as no Event of Default shall have occurred and be
continuing, the Credit Parties shall have free access to the funds in the
Concentration Accounts. Upon the occurrence and during the continuation of an
Event of Default, the Collateral Agent (for the benefit of the Secured Parties),
subject to Applicable Law, shall have the right to establish sole dominion and
control over the Concentration Accounts, and the balances in such accounts shall
be applied toward the payment of the Obligations.
(d) On or before the Closing Date, the Borrower shall deliver to
the Collateral Agent an Account Control Agreement with respect to each
Concentration Account located at a bank other than Wachovia, duly executed by
the applicable Credit Party and the applicable Lender with whom such account is
maintained. After the Closing Date, the Borrower shall deliver to the Collateral
Agent an Account Control Agreement with respect to any account which (i) is
located at a bank other than Wachovia and (ii) is either (x) a new Concentration
Account or (y) which contains or is reasonably anticipated to contain an average
daily balance of greater than $2,500,000 during any month (other than payroll
accounts), in each case duly executed by the applicable Credit Party and the
applicable Lender with whom such account is maintained.
SECTION 8.4 Credit Parties to Hold in Trust. Upon the occurrence
and during the continuance of an Event of Default, each of the Credit Parties
will, upon receipt by it of any revenue, income, profits or other sums in which
a security interest is granted by this Article 8, payable pursuant to any
agreement or otherwise, or of any check, draft, note, trade acceptance or other
instrument evidencing an obligation to pay any such sum, hold the sum or
instrument in trust for the Collateral Agent, segregate such sum or instrument
from their own assets and forthwith, without any notice, demand or other action
whatsoever (all notices, demands, or other actions on the part of either of the
Agents or any other Secured Party being expressly waived), endorse, transfer and
deliver any such sums or instruments or both, to the Collateral Agent to be
applied to the repayment of the Obligations in accordance with the provisions of
Section 8.7 hereof.
SECTION 8.5 Collections, etc. Upon the occurrence and during the
continuance of an Event of Default, the Collateral Agent may, in its sole
discretion, in its name (on behalf of the Secured Parties) or in the name of any
Credit Party or otherwise, demand, ▇▇▇ for, collect or receive any money or
property at any time payable or receivable on account of or in exchange for, or
make any compromise or settlement deemed desirable with respect to, any of the
Collateral, but shall be under no obligation so to do, or the Collateral Agent
may extend the time of payment, arrange for payment in installments, or
otherwise modify the terms of, or release, any of the Collateral, without
thereby incurring responsibility to, or discharging or otherwise affecting any
liability of, any Credit Party. The Collateral Agent will not be required to
take any steps to preserve any rights against prior parties to the Collateral.
If any Credit Party fails to make any payment or take any action required
hereunder, the Collateral Agent may make such payments and take all such actions
as the Collateral Agent reasonably deems necessary to protect the Collateral
Agent's (on behalf of the Secured Parties) security interests in the Collateral
and/or the value thereof, and the Collateral Agent is hereby authorized (without
limiting the general nature of the authority herein above conferred) to pay,
purchase, contest or compromise any Liens that in the judgment of the Collateral
Agent appear to be equal to, prior to or superior to the security interests of
the Collateral Agent (on behalf of the Secured Parties) in the Collateral and
any Liens not expressly permitted by this Credit Agreement.
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SECTION 8.6 Possession, Sale of Collateral, etc. Subject to the
terms of the Intercreditor Agreement, upon the occurrence and during the
continuance of an Event of Default, the Collateral Agent may lawfully enter upon
the premises of any Credit Party or wherever the Collateral may be, and take
possession of the Collateral, and may demand and receive such possession from
any Person who has possession thereof, and the Collateral Agent may take such
measures as it deems necessary or proper for the care or protection thereof,
including the right to remove all or any portion of the Collateral, and with or
without taking such possession may sell or cause to be sold, whenever the
Collateral Agent shall decide, in one or more sales or parcels, at such prices
as the Collateral Agent may deem appropriate, and for cash or on credit or for
future delivery, without assumption of any credit risk, all or any portion of
the Collateral, at any broker's board or at public or private sale, with ten
(10) days' written notice to the Credit Parties of the time and place of any
such public sale or sales (which notice the Credit Parties hereby agree is
reasonable) and with such other notices as may be required by Applicable Law and
cannot be waived, and neither of the Agents, the Issuing Bank, the Lenders nor
any other Secured Party shall have any liability should the proceeds resulting
from a private sale be less than the proceeds realizable from a public sale, and
the Agents, the Issuing Bank, the Lenders, any other Secured Party or any other
Person may be the purchaser of all or any portion of the Collateral so sold and
thereafter hold the same absolutely, free (to the fullest extent permitted by
Applicable Law) from any claim or right of whatever kind, including any equity
of redemption, of any Credit Party, any such demand, notice, claim, right or
equity being hereby expressly waived and released. At any sale or sales made
pursuant to this Article 8, the Agents, the Issuing Bank, the Lenders and the
other Secured Parties may bid for or purchase, free (to the fullest extent
permitted by Applicable Law) from any claim or right of whatever kind, including
any equity of redemption, of any Credit Party, any such demand, notice, claim,
right or equity being hereby expressly waived and released, any part of or all
of the Collateral offered for sale, and may make any payment on account thereof
by using any claim for moneys then due and payable to the Agents, the Issuing
Bank, the Lenders and the other Secured Parties by any Credit Party hereunder as
a credit against the purchase price. The Agents, the Issuing Bank, the Lenders
and the other Secured Parties shall in any such sale make no representations or
warranties with respect to the Collateral or any part thereof, and neither the
Agents, the Issuing Bank, the Lenders nor any other Secured Party shall be
chargeable with any of the obligations or liabilities of any Credit Party. Each
Credit Party hereby agrees (i) that it will indemnify and hold the Agents, the
Issuing Bank, the Lenders and any other Secured Party harmless from and against
any and all claims with respect to the Collateral asserted before the taking of
actual possession or control of the relevant Collateral by the Collateral Agent,
the Issuing Bank, the Lenders or any other Secured Party pursuant to this
Article 8, or arising out of any act of, or omission to act on the part of, such
Person (other than the Agents, the Issuing Bank, the Lenders and any other
Secured Party) prior to such taking of actual possession or control by such
Secured Party (whether asserted before or after such taking of possession or
control), or arising out of any act on the part of any Credit Party or its
Affiliates or agents before or after the commencement of such actual possession
or control by such Secured Party; and (ii) neither the Agents, the Issuing Bank,
the Lenders, nor any other Secured Party shall have any liability or obligation
97
to any Credit Party arising out of any such claim except for acts of willful
misconduct or gross negligence as determined by a final order or judgment of a
court of competent jurisdiction. In any action hereunder, the Agents, the
Issuing Bank, the Lenders and any other Secured Party shall be entitled if
permitted by Applicable Law to the appointment of a receiver without notice, to
take possession of all or any portion of the Collateral and to exercise such
powers as the court shall confer upon the receiver. Notwithstanding the
foregoing, upon the occurrence of an Event of Default, and during the
continuation of such Event of Default, any Agent, the Issuing Bank, any Lender
and/or any other Secured Party shall be entitled to apply, without prior notice
to any of the Credit Parties, any cash or cash items constituting Collateral in
the possession of such Secured Party to payment of the Obligations.
SECTION 8.7 Application of Proceeds on Default. Subject to the
provisions of the Intercreditor Agreement, upon the occurrence and during the
continuance of an Event of Default, the balance in any account of any Credit
Party with a Lender, all other income on the Collateral, and all proceeds from
any sale of the Collateral pursuant hereto shall be applied first toward payment
of the reasonable out-of-pocket costs and expenses paid or incurred by any Agent
in enforcing this Credit Agreement, in realizing on or protecting any Collateral
and in enforcing or collecting any Obligations or any Guaranty thereof,
including, without limitation, court costs, reasonable attorney's fees and
expenses and reasonable financial consultants' fees incurred by any Agent and
then to the indefeasible payment in full in cash of the Obligations in
accordance with Section 12.2(b) hereof. Any amounts remaining after such
indefeasible payment in full shall be remitted to the appropriate Credit Party
or as a court of competent jurisdiction may otherwise direct.
SECTION 8.8 Power of Attorney. Upon the occurrence and during the
continuance of an Event of Default which is not waived in writing by the
Required Lenders, (a) each Credit Party does hereby irrevocably make, constitute
and appoint the Collateral Agent or any of its officers or designees its true
and lawful attorney-in-fact with full power in the name of the Collateral Agent,
such other Person or such Credit Party to receive, open and dispose of all mail
addressed to any Credit Party, and to endorse any notes, checks, drafts, money
orders or other evidences of payment relating to the Collateral that may come
into the possession of the Collateral Agent with full power and right to cause
the mail of such Persons to be transferred to the Collateral Agent's own offices
or otherwise, and to do any and all other acts necessary or proper to carry out
the intent of this Credit Agreement and the grant of the security interests
hereunder and under the Fundamental Documents, and each Credit Party hereby
ratifies and confirms all that the Collateral Agent or its substitutes shall
properly do by virtue hereof; and (b) each Credit Party does hereby further
irrevocably make, constitute and appoint the Collateral Agent or any of its
officers or designees its true and lawful attorney-in-fact in the name of the
Collateral Agent, such other Person or such Credit Party (i) to enforce all of
such Credit Party's rights under and pursuant to all agreements with respect to
the Collateral, all for the sole benefit of the Collateral Agent (for the
benefit of the Secured Parties), (ii) to enter into and perform such agreements
as may be necessary in order to carry out the terms, covenants and conditions of
the Fundamental Documents that are required to be observed or performed by any
Credit Party, (iii) to execute such other and further mortgages, pledges and
assignments of the Collateral, and related instruments or agreements, as the
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Collateral Agent may reasonably require for the purpose of perfecting,
protecting, maintaining or enforcing the security interests granted to the
Collateral Agent for the benefit of the Secured Parties hereunder and under the
other Fundamental Documents and (iv) to do any and all other things necessary or
proper to carry out the intention of this Credit Agreement and the grant of the
security interests hereunder and under the other Fundamental Documents. Each of
the Credit Parties hereby ratifies and confirms in advance all that the
Collateral Agent as such attorney-in-fact or its substitutes shall properly do
by virtue of this power of attorney in accordance with the terms hereof.
SECTION 8.9 Financing Statements, Direct Payments. Each Credit
Party hereby authorizes the Collateral Agent to file UCC financing statements
and any amendments thereto or continuations thereof and any other appropriate
security documents or instruments and to give any notices necessary or desirable
to perfect the Lien of the Collateral Agent (for the benefit of the Secured
Parties) on the Collateral, in all cases without the signature of any Credit
Party or to execute such items as attorney-in-fact for any Credit Party;
provided, that the Collateral Agent shall provide copies of any such documents
or instruments to the Borrower. Each Credit Party further authorizes the
Collateral Agent upon the occurrence of an Event of Default under Article 7(b)
or Article 7(c) hereof, and during the continuation of any such Event of
Default, to notify any Account Debtors or tenants that all sums payable to any
Credit Party relating to the Collateral shall be paid directly to the Collateral
Agent.
SECTION 8.10 Further Assurances. Upon the request of the
Collateral Agent, each Credit Party hereby agrees to duly and promptly execute
and deliver, or cause to be duly executed and delivered, at the cost and expense
of the Credit Parties, such further instruments as may be necessary or proper,
in the reasonable judgment of the Collateral Agent, to carry out the provisions
and purposes of this Article 8 or to perfect and preserve the Liens of the
Collateral Agent for the benefit of the Secured Parties hereunder and under the
Fundamental Documents, in the Collateral or any portion thereof.
SECTION 8.11 Termination and Release. The security interests
granted under this Article 8 shall terminate on the Facility Termination Date.
Upon request by the Credit Parties (and at the sole expense of the Credit
Parties) after such termination, the Collateral Agent will take all reasonable
action and do all things reasonably necessary, including executing UCC
termination statements, to terminate the security interest granted to it (for
the benefit of the Secured Parties) hereunder. Upon the written request of the
Credit Parties, the Collateral Agent shall at the sole cost and expense of the
applicable Credit Party release its security interest (i) in all personal
property located in or appurtenant to a leased Real Property Asset upon the
expiration or termination without renewal of the lease for such Real Property
Asset and (ii) in any Collateral sold, transferred or otherwise disposed of by
any Credit Party to the extent such sale, transfer or other disposition is
permitted by and made in accordance with the terms of this Agreement.
SECTION 8.12 Remedies Not Exclusive. The remedies conferred upon
or reserved to the Collateral Agent in this Article 8 are intended to be in
addition to, and not in limitation of, any other remedy or remedies available to
the Collateral Agent. Without limiting the generality of the foregoing, the
Collateral Agent, the Administrative Agent, the Issuing Bank, the Lenders and
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any other Secured Party shall have all rights and remedies of a secured creditor
under Article 9 of the UCC and under any other Applicable Law.
SECTION 8.13 Continuation and Reinstatement. Each Credit Party
further agrees that the security interest granted hereunder shall continue to be
effective or be reinstated, as the case may be, if at any time payment or any
part thereof of any Obligation is rescinded or must otherwise be restored by
either Agent, the Issuing Bank, any Lender or any other Secured Party upon the
bankruptcy or reorganization of any Credit Party or otherwise.
9. GUARANTY
SECTION 9.1 Guaranty. (a) Each Guarantor unconditionally and
irrevocably guarantees to the Secured Parties the due and punctual payment by,
and performance of, the Obligations (including interest accruing on and after
the filing of any petition in bankruptcy or of reorganization of the obligor
whether or not post filing interest is allowed in such proceeding). Each
Guarantor further agrees that the Obligations may be increased, extended or
renewed, in whole or in part, without notice or further assent from it (except
as may be otherwise required herein), and it will remain bound upon this
Guaranty notwithstanding any extension or renewal of any Obligation.
(b) Each Guarantor waives presentation to, demand for payment
from and protest to, as the case may be, any Credit Party or any other guarantor
of any of the Obligations, and also waives notice of protest for nonpayment,
notice of acceleration and notice of intent to accelerate. The obligations of
each Guarantor hereunder shall not be affected by (i) the failure of either
Agent, the Issuing Bank, any Lender or any other Secured Party to assert any
claim or demand or to enforce any right or remedy against the Borrower or any
Guarantor or any other guarantor under the provisions of this Credit Agreement
or any other agreement or otherwise; (ii) any extension or renewal of any
provision hereof or thereof; (iii) the failure of either Agent, the Issuing
Bank, any Lender or any other Secured Party to obtain the consent of the
Guarantor with respect to any rescission, waiver, compromise, acceleration,
amendment or modification of any of the terms or provisions of this Credit
Agreement, any notes evidencing any of the Loans hereunder or of any other
Fundamental Document or other agreement; (iv) the release, exchange, waiver or
foreclosure of any security held by the Collateral Agent for the Obligations or
any of them; (v) the failure of either Agent, the Issuing Bank, any Lender or
any other Secured Party to exercise any right or remedy against any other
Guarantor or any other guarantor of the Obligations; or (vi) the release or
substitution of any Guarantor or guarantor.
(c) Each Guarantor further agrees that this Guaranty constitutes
a guaranty of performance and of payment when due and not just of collection,
and waives any right to require that any resort be had by either Agent, the
Issuing Bank, any Lender or any other Secured Party to any security held for
payment of the Obligations or to any balance of any deposit, account or credit
on the books of either Agent, the Issuing Bank, any Lender or any other Secured
Party in favor of the Borrower or any Guarantor, or to any other Person.
(d) Each Guarantor hereby expressly assumes all responsibilities
to remain informed of the financial condition of the Borrower, the Guarantors
and any other guarantors and any circumstances affecting the Collateral or the
Real Property Assets or the Pledged Securities or the ability of the Borrower to
perform under this Credit Agreement.
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(e) Each Guarantor's obligations under the Guaranty shall not be
affected by the genuineness, validity, regularity or enforceability of the
Obligations, any notes evidencing any of the Loans hereunder or any other
instrument evidencing any Obligations, or by the existence, validity,
enforceability, perfection, or extent of any Lien on any Collateral or Real
Property Asset or Pledged Collateral securing any Obligation or by any other
circumstance relating to the Obligations which might otherwise constitute a
defense to this Guaranty. Neither of the Agents, the Issuing Bank, any of the
Lenders nor any other Secured Party make any representation or warranty with
respect to any such circumstances or have any duty or responsibility whatsoever
to any Guarantor in respect to the management and maintenance of the Obligations
or any collateral security for the Obligations.
SECTION 9.2 No Impairment of Guaranty, etc. The obligations of
each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (except indefeasible payment and
performance in full in cash of the Obligations), including, without limitation,
any claim of waiver, release, surrender, alteration or compromise, and shall not
be subject to any defense or set-off, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Guarantor hereunder shall not be discharged or impaired or
otherwise affected by the failure of either Agent, the Issuing Bank, any Lender
or any other Secured Party to assert any claim or demand or to enforce any
remedy under this Credit Agreement or any other Fundamental Document or other
agreement, by any waiver or modification of any provision hereof or thereof, by
any default, failure or delay, willful or otherwise, in the performance of the
Obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of
such Guarantor or would otherwise operate as a discharge of such Guarantor as a
matter of law, unless and until the Facility Termination Date.
SECTION 9.3 Continuation and Reinstatement, etc. (a) Each
Guarantor further agrees that its Guaranty hereunder shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any Obligation is rescinded or must otherwise be restored by
either Agent, the Issuing Bank, any Lender or any other Secured Party upon the
bankruptcy or reorganization of Borrower or a Guarantor, or otherwise. In
furtherance of the provisions of this Article 9, and not in limitation of any
other right which either Agent, the Issuing Bank, any Lender or any other
Secured Party may have at law or in equity against the Borrower, a Guarantor or
any other Person by virtue hereof, upon failure of the Borrower to pay any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice or otherwise, each Guarantor hereby promises to and
will, upon receipt of written demand by either Agent, the Issuing Bank, any
Lender or any other Secured Party, forthwith pay or cause to be paid to the
Collateral Agent for the benefit of the Secured Parties (as applicable) in cash
an amount equal to the unpaid amount of all the Obligations with interest
thereon at a rate of interest equal to the rate specified in Section 2.13(a)
hereof, and thereupon the Collateral Agent shall assign such Obligation,
together with all security interests, if any, then held by the Collateral Agent
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in respect of such Obligation, to the Guarantors making such payment; such
assignment to be subordinate and junior to the rights of the Collateral Agent on
behalf of the Secured Parties with regard to amounts payable by the Borrower in
connection with the remaining unpaid Obligations (including interest accruing on
and after the filing of any petition in bankruptcy or of reorganization of an
obligor whether or not post filing interest is allowed in such proceeding) and
to be pro tanto to the extent to which the Obligation in question was discharged
by the Guarantor or Guarantors making such payments.
(b) All rights of a Guarantor against the Borrower, arising as a
result of the payment by such Guarantor of any sums to the Collateral Agent for
the benefit of the Secured Parties or directly to the Secured Parties hereunder
by way of right of subrogation or otherwise, shall in all respects be
subordinated and junior in right of payment to, and shall not be exercised by
such Guarantor until and unless, the prior indefeasible payment in full in cash
of all the Obligations (including interest accruing on and after the filing of
any petition in bankruptcy or of reorganization of an obligor whether or not
post filing interest is allowed in such proceeding). If any amount shall be paid
to such Guarantor for the account of the Borrower, such amount shall be held in
trust for the benefit of the Collateral Agent, segregated from such Guarantor's
own assets, and shall forthwith be paid to the Collateral Agent on behalf of the
Secured Parties to be credited and applied to the Obligations, whether matured
or unmatured.
SECTION 9.4 Limitation on Guaranteed Amount etc. Notwithstanding
any other provision of this Article 9, the amount guaranteed by each Guarantor
hereunder shall be limited to the extent, if any, required so that its
obligations under this Article 9 shall not be subject to avoidance under Section
548 of the Bankruptcy Code or to being set aside or annulled under any
Applicable Law relating to fraud on creditors. In determining the limitations,
if any, on the amount of any Guarantor's obligations hereunder pursuant to the
preceding sentence, it is the intention of the parties hereto that any rights of
subrogation or contribution which such Guarantor may have under this Article 9,
any other agreement or Applicable Law shall be taken into account.
10. PLEDGE
SECTION 10.1 Pledge. Each Pledgor, as security for the due and
punctual payment of the Obligations (including interest accruing on and after
the filing of any petition in bankruptcy or of reorganization of the Borrower
whether or not post filing interest is allowed in such proceeding) in the case
of the Borrower and as security for its obligations under Article 9 hereof in
the case of a Pledgor which is a Guarantor, hereby pledges, hypothecates,
assigns, transfers, sets over and delivers unto the Collateral Agent for the
benefit of the Secured Parties, a security interest in all Pledged Collateral
now owned or hereafter acquired by it. The Pledgors shall deliver to the
Collateral Agent the definitive instruments (if any) representing all Pledged
Securities (or cause the prepetiton collateral agent in possession of any such
instruments to so deliver), accompanied by undated stock powers, duly endorsed
or executed in blank by the appropriate Pledgor, and such other instruments or
documents as the Collateral Agent or its counsel shall reasonably request. Each
delivery of securities being pledged hereunder shall be accompanied by a
schedule showing a description of the securities theretofore and then being
pledged hereunder. Each schedule so delivered shall supersede any prior
schedules so delivered.
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SECTION 10.2 Covenant. Each Pledgor covenants that as stockholder
or partner or member of each of its respective Subsidiaries it will not take any
action to allow any additional shares of common stock, Preferred Stock or other
equity securities or interests of any of its respective Subsidiaries or any
securities convertible or exchangeable into common or Preferred Stock of such
Subsidiaries to be issued, or grant any options or warrants, unless all of such
securities are pledged to the Collateral Agent (for the benefit of the Secured
Parties); provided that with respect to a foreign Subsidiary for which a Pledgor
has pledged 65% of the Capital Stock thereof pursuant to the terms hereof, such
Pledgor need only pledge to the Collateral Agent (for the benefit of the Secured
Parties) the percentage of such securities required in order to maintain an
overall pledge of 65% of the Capital Stock of such Subsidiary).
SECTION 10.3 Registration in Nominee Name; Denominations. Upon
the occurrence or continuation of an Event of Default, the Collateral Agent
shall have the right (in its sole discretion) to hold the certificates
representing any Pledged Securities (a) in its own name (on behalf of itself and
any of the Secured Parties) or in the name of its nominee or (b) in the name of
the appropriate Pledgor, endorsed or assigned in blank or in favor of the
Collateral Agent. Upon the occurrence or continuation of an Event of Default,
the Collateral Agent shall have the right to exchange the certificates
representing any of the Pledged Securities for certificates of smaller or larger
denominations for any purpose consistent with this Credit Agreement.
SECTION 10.4 Voting Rights; Dividends; etc. (a) The appropriate
Pledgor shall be entitled to exercise any and all voting and/or consensual
rights and powers accruing to an owner of the Pledged Securities being pledged
by it hereunder or any part thereof for any purpose not inconsistent with the
terms hereof, at all times, except as expressly provided in paragraph (c) below.
(b) All dividends or distributions of any kind whatsoever (other
than (x) cash dividends or (y) distributions expressly permitted by Section 6.5
hereof) received by a Pledgor, whether resulting from a subdivision,
combination, or reclassification of the outstanding capital stock of the issuer
or received in exchange for Pledged Securities or any part thereof or as a
result of any merger, consolidation, acquisition, or other exchange of assets to
which the issuer may be a party, or otherwise, shall be and become part of the
Pledged Collateral pledged hereunder and shall immediately be delivered to the
Collateral Agent to be held subject to the terms hereof. All dividends and
distributions which are received contrary to the provisions of this subsection
(b) shall be received in trust for the benefit of the Secured Parties,
segregated from such Pledgor's own assets, and shall be delivered to the
Collateral Agent.
(c) Upon the occurrence and during the continuance of an Event of
Default and notice from the Collateral Agent of the transfer of such rights to
the Collateral Agent, all rights of a Pledgor (i) to exercise the voting and/or
consensual rights and powers which it is entitled to exercise pursuant to this
Section 10.4 and (ii) to receive and retain any dividends and distributions,
shall cease, and all such rights shall thereupon become vested in the Collateral
Agent, which shall have the sole and exclusive right and authority to exercise
such voting and/or consensual rights and receive such dividends and
distributions until such time as such Event of Default has been cured.
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SECTION 10.5 Remedies Upon Default. If an Event of Default shall
have occurred and be continuing, the Collateral Agent, on behalf of the Secured
Parties, may sell the Pledged Collateral, or any part thereof, at public or
private sale or at any broker's board or on any securities exchange, for cash,
upon credit or for future delivery as the Collateral Agent shall deem
appropriate subject to the terms hereof or as otherwise provided in the UCC. The
Collateral Agent shall be authorized at any such sale (if it deems it advisable
to do so) to restrict to the full extent permitted by Applicable Law the
prospective bidders or purchasers to Persons who will represent and agree that
they are purchasing the Pledged Collateral for their own account for investment
and not with a view to the distribution or sale thereof, and upon consummation
of any such sale, the Collateral Agent shall have the right to assign, transfer,
and deliver to the purchaser or purchasers thereof the Pledged Collateral so
sold. Each such purchaser at any such sale shall hold the property sold
absolutely, free from any claim or right on the part of any Pledgor. The
Collateral Agent shall give the Pledgors ten (10) days' written notice of any
such public or private sale, or sale at any broker's board or on any such
securities exchange, or of any other disposition of the Pledged Collateral. Such
notice, in the case of public sale, shall state the time and place for such sale
and, in the case of sale at a broker's board or on a securities exchange, shall
state the board or exchange at which such sale is to be made and the day on
which the Pledged Collateral, or portion thereof, will first be offered for sale
at such board or exchange. Any such public sale shall be held at such time or
times within ordinary business hours and at such place or places as the
Collateral Agent may fix and shall state in the notice of such sale. At any such
sale, the Pledged Collateral, or portion thereof, to be sold may be sold in one
lot as an entirety or in separate parcels, as the Collateral Agent may (in its
sole discretion) determine. The Collateral Agent shall not be obligated to make
any sale of the Pledged Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of the Pledged Collateral may have
been given. The Collateral Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In case the sale of all or any part of the Pledged Collateral is made
on credit or for future delivery, the Pledged Collateral so sold shall be
retained by the Collateral Agent until the sale price is paid by the purchaser
or purchasers thereof, but the Collateral Agent shall not incur any liability in
case any such purchaser or purchasers shall fail to take up and pay for the
Pledged Collateral so sold and, in case of any such failure, such Pledged
Collateral may be sold again upon like notice. At any sale or sales made
pursuant to this Section 10.5, the Collateral Agent, the Administrative Agent,
the Issuing Bank, any Lender or any other Secured Party may bid for or purchase,
free from any claim or right of whatever kind, including any equity of
redemption, of the Pledgors, any such demand, notice, claim, right or equity
being hereby expressly waived and released, any or all of the Pledged Collateral
offered for sale, and may make any payment on the account thereof by using any
claim for moneys then due and payable to the Agents, the Issuing Bank, the
Lenders and any other Secured Party by any Credit Party as a credit against the
purchase price; and the Collateral Agent, upon compliance with the terms of
sale, may hold, retain and dispose of the Pledged Collateral without further
accountability therefor to any Pledgor or any third party (other than to the
Secured Parties). The Collateral Agent shall in any such sale make no
representations or warranties with respect to the Pledged Collateral or any part
thereof, and shall not be chargeable with any of the obligations or liabilities
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of the Pledgors with respect thereto. The Collateral Agent may exercise, either
by itself or by its nominee or designee, in the name of the applicable
Pledgor(s), all of the rights, powers and remedies granted to the Collateral
Agent in this Section 10 in respect of any Pledged Collateral, any
organizational document pursuant to which any Pledgor owns its Pledged
Collateral, and may exercise and enforce all of the Collateral Agent's rights
and remedies hereunder and under law. Each Pledgor hereby agrees (i) it will
indemnify and hold each of the Agents, the Issuing Bank, the Lenders and any
other Secured Party harmless from and against any and all claims with respect to
the Pledged Collateral asserted before the taking of actual possession or
control of the Pledged Collateral by the Collateral Agent pursuant to this
Credit Agreement, or arising out of any act of, or omission to act on the part
of, any Person prior to such taking of actual possession or control by the
Collateral Agent (whether asserted before or after such taking of possession or
control), or arising out of any act on the part of any Pledgor, its agents or
Affiliates before or after the commencement of such actual possession or control
by the Collateral Agent and (ii) the Agents, the Issuing Bank, the Lenders and
any other Secured Party shall have no liability or obligation arising out of any
such claim. As an alternative to exercising the power of sale herein conferred
upon it, the Collateral Agent may proceed by a suit or suits at law or in equity
to foreclose upon the Collateral and Pledged Securities under this Credit
Agreement and to sell the Pledged Collateral, or any portion thereof, pursuant
to a judgment or decree of a court or courts having competent jurisdiction.
SECTION 10.6 Application of Proceeds of Sale and Cash. Subject to
the provisions of the Intercreditor Agreement, the proceeds of sale of the
Pledged Collateral sold pursuant to Section 10.5 hereof shall be applied by the
Collateral Agent on behalf of the Secured Parties to the payment of all
reasonable out-of-pocket costs and expenses paid or incurred by either Agent in
connection with such sale, including, without limitation, all court costs, the
reasonable fees and expenses of counsel for either Agent in connection
therewith, the reasonable fees and expenses of any financial consultants in
connection therewith and the payment of all reasonable out-of-pocket costs and
expenses paid or incurred by either Agent in enforcing this Credit Agreement, in
realizing or protecting any Collateral and in enforcing or collecting any
Obligations or any Guaranty thereof, including, without limitation, court costs,
the reasonable attorneys' fees and expenses incurred by either Agent in
connection therewith and the reasonable fees and expenses of any financial
consultants in connection therewith and then to the indefeasible payment in full
in cash of the Obligations in accordance with Section 12.2(b) hereof. Any
amounts remaining after such indefeasible payment in full shall be applied to
repay the other obligations set forth in the Intercreditor Agreement, or, if no
such obligations are outstanding, then such amounts shall be remitted to the
appropriate Pledgor, or as a court of competent jurisdiction may otherwise
direct.
SECTION 10.7 Securities Act, etc. In view of the position of each
Pledgor in relation to the Pledged Securities pledged by it, or because of other
present or future circumstances, a question may arise under the Securities Act
of 1933, as amended, as now or hereafter in effect, or any similar statute
hereafter enacted analogous in purpose or effect (such Act and any such similar
statute as from time to time in effect being hereinafter called the "Federal
Securities Laws"), with respect to any disposition of the Pledged Securities
permitted hereunder. Each Pledgor understands that compliance with the Federal
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Securities Laws may very strictly limit the course of conduct of the Collateral
Agent if the Collateral Agent were to attempt to dispose of all or any part of
the Pledged Securities, and may also limit the extent to which or the manner in
which any subsequent transferee of any Pledged Securities may dispose of the
same. Similarly, there may be other legal restrictions or limitations affecting
the Collateral Agent in any attempt to dispose of all or any part of the Pledged
Securities under applicable Blue Sky or other state securities laws, or similar
laws analogous in purpose or effect. Under Applicable Law, in the absence of an
agreement to the contrary, the Collateral Agent may perhaps be held to have
certain general duties and obligations to a Pledgor to make some effort towards
obtaining a fair price even though the Obligations may be discharged or reduced
by the proceeds of a sale at a lesser price. Each Pledgor waives to the fullest
extent permitted by Applicable Law any such general duty or obligation to it,
and the Pledgors and/or the Credit Parties will not attempt to hold the
Collateral Agent, the Administrative Agent, the Issuing Bank, any Lender or any
other Secured Party responsible for selling all or any part of the Pledged
Securities at an inadequate price, even if the Collateral Agent shall accept the
first offer received or does not approach more than one possible purchaser.
Without limiting the generality of the foregoing, the provisions of this Section
10.7 would apply if, for example, the Collateral Agent were to place all or any
part of the Pledged Securities for private placement by an investment banking
firm, or if such investment banking firm purchased all or any part of the
Pledged Securities for its own account, or if the Collateral Agent placed all or
any part of the Pledged Securities privately with a purchaser or purchasers.
SECTION 10.8 Continuation and Reinstatement. Each Pledgor further
agrees that its pledge hereunder shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any Obligation is rescinded or must otherwise be restored by either Agent, the
Issuing Bank, any Lender or any other Secured Party upon the bankruptcy or
reorganization of any Pledgor or otherwise.
SECTION 10.9 Termination. The pledge referenced herein shall
terminate on the Facility Termination Date, at which time the Collateral Agent
shall assign and deliver to the party then acting as collateral agent for the
remaining Secured Parties under the Intercreditor Agreement (or, if the
Intercreditor Agreement shall no longer be in effect, than to the designee of
the Noteholders and the A-Advanced Lender), such of the Pledged Securities (if
any) as shall not have been sold or otherwise applied by the Collateral Agent
pursuant to the terms hereof and shall still be held by it hereunder, together
with appropriate instruments of reassignment and release. Any such reassignment
shall be free and clear of all Liens, arising by, under or through any Lender
but shall otherwise be without recourse upon or warranty by the Collateral Agent
and at the expense of the Pledgors; provided, however, that if the obligations
under the Note Agreement and the A-Advanced Guaranty shall have been repaid in
full, then the Collateral Agent shall assign such Pledged Securities to the
appropriate Pledgor, or to such Person or Persons as such Pledgor shall
designate, against receipt.
11. CASH COLLATERAL
SECTION 11.1 Cash Collateral Account. There shall be established
with the Collateral Agent an account (the "Cash Collateral Account") in the name
of the Collateral Agent (for the benefit of the Secured Parties), into which the
Borrower may from time to time deposit Dollars pursuant to, and in accordance
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with Section 2.9(j) hereof. Except to the extent otherwise provided in this
Article 11, the Cash Collateral Account shall be under the sole dominion and
control of the Collateral Agent and shall be subject to a control agreement
entered into between the Borrower and the Collateral Agent.
SECTION 11.2 Investment of Funds. (a) The Collateral Agent is
hereby authorized and directed to invest and reinvest the funds from time to
time deposited into the Cash Collateral Account, so long as no Event of Default
has occurred and is continuing, on the written instructions of the Borrower or,
if the Borrower shall fail to give such instructions upon delivery of any such
funds, in the Cash Equivalents selected in the sole discretion of the Collateral
Agent.
(b) Any net income or gain on the investment of funds from time
to time held in the Cash Collateral Account, shall be promptly reinvested by the
Collateral Agent as a part of the Cash Collateral Account; and any net loss on
any such investment shall be charged against the Cash Collateral Account. So
long as no Event of Default has occurred and is continuing, the Borrower may
request from time to time that the Collateral Agent pay to the Borrower any
interest which has accrued upon the balance of the Cash Collateral Account;
provided, that the failure by the Collateral Agent to comply with such request
shall not constitute a default hereunder or give rise to any liability of
Collateral Agent hereunder.
(c) Neither of the Agents, the Issuing Bank, any of the Lenders
nor any other Secured Party shall be a trustee for any of the Credit Parties, or
shall have any obligations or responsibilities, or shall be liable for anything
done or not done, in connection with the Cash Collateral Account, except as
expressly provided herein and except that the Collateral Agent shall have the
obligations of a secured party under the UCC. Neither of the Agents, the Issuing
Bank, any of the Lenders nor any other Secured Party shall have any obligation
or responsibility or shall be liable in any way for any investment decision made
in accordance with this Section 11.2 or for any decrease in the value of the
investments held in the Cash Collateral Account, other than as arising from
their respective gross negligence or willful misconduct.
SECTION 11.3 Grant of Security Interest. For value received and
to induce the Issuing Bank to issue Letters of Credit and the Lenders to enter
into this Credit Agreement and to make Loans to the Borrower and to acquire
participations in Letters of Credit from time to time as provided for in this
Credit Agreement, as security for the payment of all of the Obligations, each of
the Credit Parties hereby assigns to the Collateral Agent (for the benefit of
the Secured Parties) and grants to the Collateral Agent (for the benefit of the
Secured Parties), a first and prior Lien upon all of such Credit Party's rights
in and to the Cash Collateral Account, all cash, documents, instruments and
securities from time to time held therein, and all rights pertaining to
investments of funds in the Cash Collateral Account and all products and
proceeds of any of the foregoing. All cash, documents, instruments and
securities from time to time on deposit in the Cash Collateral Account, and all
rights pertaining to investments of funds in the Cash Collateral Account shall
immediately and without any need for any further action on the part of any of
the Credit Parties, the Collateral Agent or any other Secured Party, become
subject to the Lien set forth in this Section 11.3, be deemed Collateral for all
purposes hereof and be subject to the provisions of this Credit Agreement.
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SECTION 11.4 Remedies. Subject to the provisions of the
Intercreditor Agreement, at any time during the continuation of an Event of
Default, the Collateral Agent may sell any documents, instruments and securities
held in the Cash Collateral Account and may immediately apply the proceeds
thereof and any other cash held in the Cash Collateral Account in accordance
with Section 12.2(b).
12. THE AGENTS AND THE ISSUING BANK
SECTION 12.1 Administration by the Agents. (a) The general
administration of the Fundamental Documents and any other documents contemplated
by this Credit Agreement or any other Fundamental Document shall be by the
Administrative Agent, the Collateral Agent or their respective designees. Except
as otherwise expressly provided herein, the Issuing Bank and each of the Lenders
hereby irrevocably authorizes the Administrative Agent or the Collateral Agent,
at its discretion, to take or refrain from taking such actions as agent on its
behalf and to exercise or refrain from exercising such powers under the
Fundamental Documents, any notes evidencing any of the Loans hereunder and any
other documents contemplated by this Credit Agreement or any other Fundamental
Document as are expressly delegated by the terms hereof or thereof, as
appropriate, to such Agent together with all powers reasonably incidental
thereto. Neither of the Agents shall have any duties or responsibilities except
as set forth in the Fundamental Documents.
(b) The Secured Parties hereby authorize the Collateral Agent
(in its sole discretion):
(i) in connection with the sale or other disposition of any
asset included in the Collateral or in the Real Property Assets or all
of the capital stock of any Guarantor, to the extent undertaken in
accordance with the terms of this Credit Agreement, to release a Lien
granted to it (for the benefit of the Secured Parties) on such asset or
capital stock and/or to release such Guarantor from its obligations
hereunder; (ii) to determine that the cost to the Borrower or another
Credit Party is disproportionate to the benefit to be realized by the
Agents, the Issuing Bank, the Lenders and the other Secured Parties by
perfecting a Lien in a given asset or group of assets included in the
Collateral and that the Borrower or other Credit Party should not be
required to perfect such Lien in favor of the Collateral Agent (for the
benefit of the Secured Parties);
(iii) to appoint subagents to be the holder of record of a Lien
to be granted to the Collateral Agent (for the benefit of the Secured
Parties) or to hold on behalf of the Collateral Agent such Collateral or
instruments relating thereto;
(iv) to enter into and perform its obligations under the other
Fundamental Documents; and
(v) to execute and deliver the agreements contemplated by
Section 12.13 hereof.
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SECTION 12.2 Advances and Payments. (a) On the date of each Loan,
the Administrative Agent shall be authorized (but not obligated) to advance, for
the account of each of the applicable Lenders, the amount of the applicable Loan
to be made by it in accordance with its proportionate share of its Commitment
hereunder. Each of the Lenders hereby authorizes and requests the Administrative
Agent to advance for its account, pursuant to the terms hereof, the amount of
the Loan to be made by it, and each of the Lenders agrees forthwith to reimburse
the Administrative Agent in immediately available funds for the amount so
advanced on its behalf by the Administrative Agent. If any such reimbursement is
not made in immediately available funds on the same day on which the
Administrative Agent shall have made any such amount available on behalf of any
Lender, such Lender shall pay interest to the Administrative Agent at a rate per
annum equal to the Administrative Agent's cost of obtaining overnight funds in
the New York Federal Funds Market for the first three days following the time
when the Lender fails to make the required reimbursement, and thereafter at a
rate per annum equal to the Base Rate plus the Applicable Interest Margin for
Base Rate Loans. If and to the extent that any such reimbursement shall not have
been made to the Administrative Agent, the Borrower agrees to repay to the
Administrative Agent forthwith on demand a corresponding amount with interest
thereon for each day from the date such amount is made available to the Borrower
until the date such amount is repaid to the Administrative Agent at the Base
Rate plus the Applicable Interest Margin for Base Rate Loans.
(b) If a Default or Event of Default has occurred and is then
continuing, any amounts received by the Administrative Agent in connection with
the Fundamental Documents, the application of which is not otherwise provided
for, shall be applied as follows:
first, to pay to the Agents all unreimbursed costs and
expenses of the Agents which are payable by the Borrower or
any of the other Credit Parties pursuant to any of the
Fundamental Documents and all unreimbursed costs and
expenses of the Lenders which are payable pursuant to this
Credit Agreement; second, to pay pro rata to each Lender
with a Loan outstanding, accrued but unpaid interest on the
Loans in accordance with the amount of outstanding Loans
owed to each Lender; third, to pay pro rata to each Lender
the accrued but unpaid Commitment Fees in accordance with
each Lender's Percentage; fourth, to pay pro rata to each
Agent and each Lender all unpaid Fees; fifth, to pay pro
rata to each Lender with a Loan outstanding, principal on
the Loans in accordance with the amount of outstanding
Loans owed to each Lender; and sixth, to pay any other
amounts then due under this Credit Agreement or any other
Fundamental Document. All amounts to be paid to any Lender
by the Administrative Agent shall be credited to that
Lender, after collection by the Administrative Agent, in
immediately available funds either by wire transfer or
deposit in such Lender's correspondent account with the
Administrative Agent, or as such Lender and the
Administrative Agent shall agree in writing from time to
time.
SECTION 12.3 Sharing of Setoffs and Cash Collateral. (a) Each of
the Lenders agrees that if it shall, through the exercise of a right of banker's
lien, set off or counterclaim against any Credit Party (including, but not
limited to, pursuant to Section 13.21 hereof or as a secured claim under Section
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506 of the Bankruptcy Code or other security or interest arising from, or in
lieu of, such secured claim and received by such Lender under any applicable
bankruptcy, insolvency or other similar law) or otherwise, obtain payment in
respect of its Loans as a result of which the unpaid portion of its Loans is
proportionately less than the unpaid portion of Loans of any of the other
Lenders (a) it shall promptly purchase at par (and shall be deemed to have
thereupon purchased) from such other Lenders a participation in the Loans of
such other Lenders, so that the aggregate unpaid principal amount of each of the
Lender's Loans and its participation in Loans of the other Lenders shall be in
the same proportion to the aggregate unpaid principal amount of all Loans then
outstanding as the principal amount of its Loans prior to the obtaining of such
payment was to the principal amount of all Loans outstanding prior to the
obtaining of such payment and (b) such other adjustments shall be made from time
to time as shall be equitable to ensure that the Lenders share any such payment
pro rata. If all or any portion of such excess payment is thereafter recovered
from the Lender which originally received such excess payment, such purchase (or
portion thereof) shall be canceled and the purchase price restored to the extent
of such recovery. The Credit Parties expressly consent to the foregoing
arrangements and agree that any Lender or Lenders holding (or deemed to be
holding) a participation in a Loan may exercise any and all rights of banker's
lien, set off or counterclaim with respect to any and all moneys owing by the
Borrower to such Lender or Lenders as fully as if such Lender or Lenders held
such and was the original obligee on such Loan or on any note evidencing such
Loan (if applicable), in the amount of such participation.
(b) The Administrative Agent is hereby authorized at any time and
from time to time, to the fullest extent permitted by Applicable Law, to set off
and apply any and all amounts received by the Administrative Agent for the
account of a Defaulting Lender to the satisfaction of the unpaid obligations
owing by such Defaulting Lender to the Administrative Agent, the Collateral
Agent, or the Issuing Bank and the rights of such Defaulting Lender with respect
to all such amounts shall be subject and subordinate to the rights of the
Administrative Agent, the Collateral Agent, and the Issuing Bank, as the case
may be, to be paid the amounts owing to it by such Defaulting Lender.
SECTION 12.4 Notice to the Lenders. Upon receipt by the
Administrative Agent or the Issuing Bank from any of the Credit Parties of any
communication calling for an action on the part of the Lenders, or upon written
notice to the Administrative Agent of any Event of Default, the Administrative
Agent or the Issuing Bank will in turn promptly inform the other Lenders in
writing (which shall include facsimile communications) of the nature of such
communication or of the Event of Default, as the case may be.
SECTION 12.5 Liability of the Administrative Agent, Collateral
Agent and the Issuing Bank. (a) The Administrative Agent, the Collateral Agent
and the Issuing Bank, when acting on behalf of the Lenders (or in the case of
the Collateral Agent, when acting on behalf of the Secured Parties), may execute
any of its duties under this Credit Agreement or the other Fundamental Documents
by or through its officers, agents, or employees and neither the Administrative
Agent, the Collateral Agent, the Issuing Bank nor their respective officers,
agents or employees shall be liable to the Lenders or any of them for any action
taken or omitted to be taken in good faith, nor be responsible to the Lenders or
to any of them for the consequences of any oversight or error of judgment, or
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for any loss, unless the same shall happen through its gross negligence or
willful misconduct. The Administrative Agent, the Collateral Agent, the Issuing
Bank and their respective directors, officers, agents, and employees shall in no
event be liable to the Lenders or to any of them, nor shall any Lender have any
cause of action against any of them for any action taken or omitted to be taken
by it pursuant to instructions received by it from the Required Lenders or in
reliance upon the advice of counsel selected by it with reasonable care or
counsel to the Borrower. Without limiting the foregoing, neither the
Administrative Agent, the Collateral Agent, the Issuing Bank nor any of their
respective directors, officers, employees, or agents shall be responsible to any
of the Lenders for the due execution, validity, genuineness, effectiveness,
sufficiency, or enforceability of, or for any statement, warranty, or
representation in, or for the perfection of any security interest contemplated
by, this Credit Agreement, any other Fundamental Document or any related
agreement, document or order, or for freedom of any of the Collateral or any of
the Real Property Assets or any of the Pledged Securities from prior Liens or
security interests, or shall be required to ascertain or to make any inquiry
concerning the performance or observance by the Borrower or any other Credit
Party of any of the terms, conditions, covenants, or agreements of this Credit
Agreement, any other Fundamental Document, or any related agreement or document.
(b) None of the Administrative Agent (in its capacity as agent
for the Lenders), the Collateral Agent (in its capacity as agent for the Secured
Parties), the Issuing Bank or any of their respective directors, officers,
employees, or agents shall have any responsibility to the Borrower or any other
Credit Party on account of the failure or delay in performance or breach by any
of the Lenders of any of such Lender's obligations under this Credit Agreement,
the other Fundamental Documents or any related agreement or document or in
connection herewith or therewith. No Lender nor any of its directors, officers,
employees or agents shall have any responsibility to the Borrower or any other
Credit Party on account of the failure or delay in performance or breach by any
other Lender of such other Lender's obligations under this Credit Agreement, the
other Fundamental Documents or any related agreement or document or in
connection herewith or therewith, other than as arising from their respective
gross negligence or willful misconduct.
(c) The Administrative Agent (as agent for the Lenders), the
Collateral Agent (as agent of the Secured Parties) and the Issuing Bank shall be
entitled to rely on any communication, instrument, or document believed by it to
be genuine or correct and to have been signed or sent by a Person or Persons
believed by it to be the proper Person or Persons, and it shall be entitled to
rely on advice of legal counsel (who may be counsel for the Borrower),
independent public accountants, and other professional advisers and experts
selected by it.
(d) Each of the Administrative Agent, the Collateral Agent and
the Issuing Bank shall be entitled to refrain from any act or the taking of any
action (including the failure to take an action) in connection herewith or any
of the other Fundamental Documents or from the exercise of any power, discretion
or authority vested in it hereunder or thereunder unless and until it shall have
received instructions in respect thereof from the Required Lenders, and, upon
receipt of such instructions from the Required Lenders, it shall be entitled to
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act or (where so instructed) refrain from acting, or to exercise such power,
discretion or authority, in accordance with such instructions.
SECTION 12.6 Reimbursement and Indemnification. Each of the
Lenders agrees (i) to reimburse the Administrative Agent, the Collateral Agent
and/or the Issuing Bank for such Lender's pro rata share of any expenses and
fees incurred for the benefit of the Lenders under the Fundamental Documents,
including, without limitation, counsel fees and compensation of agents,
employees, financial advisors and other professionals paid for services rendered
on behalf of the Agents, the Issuing Bank or the Lenders, and any other expense
incurred in connection with the operations or enforcement thereof not reimbursed
by or on behalf of the Borrower and (ii) to indemnify and hold harmless the
Administrative Agent, the Collateral Agent and/or the Issuing Bank and any of
their respective directors, officers, employees, or agents, on demand, in
accordance with such Lender's Percentage, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements (including reasonable attorneys' fees and
disbursements) of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against, it or any of them in any way relating to or
arising out of any of the Fundamental Documents or any related agreement or
document, or any action taken or omitted to be taken by it or any of them under
any of the Fundamental Documents or any related agreement or document, to the
extent not reimbursed by or on behalf of the Borrower or any other Credit Party
(except such as shall result from the gross negligence or willful misconduct of
the Person to be reimbursed, indemnified or held harmless, as applicable) and
(iii) to indemnify and hold harmless the Issuing Bank and any of its directors,
officers, employees, or agents, on demand, in the amount of its Percentage
share, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against it or any of them in any way relating to or arising out of the issuance
of any Letters of Credit or the failure to issue Letters of Credit (except as
shall result from the gross negligence or willful misconduct of the Person to be
reimbursed, indemnified or held harmless, as applicable). If any indemnity
furnished to either Agent or the Issuing Bank for any purpose shall, in the
opinion of such Agent or the Issuing Bank, as the case may be, be insufficient
or become impaired, such Agent or the Issuing Bank, as the case may be, may call
for additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished; provided, that in no event
shall this sentence require any Lender to indemnify any Agent or the Issuing
Bank against any liability, obligation, loss, damage, penalty, action, judgment,
suit, cost, expense or disbursement in excess of such Lender's pro rata share
thereof. To the extent indemnification payments made by the Lenders pursuant to
this Section 12.6 are subsequently recovered by the Administrative Agent, the
Collateral Agent or the Issuing Bank from a Credit Party, the Administrative
Agent, the Collateral Agent or the Issuing Bank, as applicable, will promptly
refund such previously paid indemnity payments to the Lenders.
SECTION 12.7 Rights of the Agents. It is understood and agreed
that each of the Agents and the Issuing Bank shall have the same duties, rights
and powers as a Lender hereunder (including the right to give such instructions)
as any of the other Lenders and may exercise such rights and powers, as well as
its rights and powers under other agreements and instruments to which it is or
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may be party, and engage in other transactions with any Credit Party or
Affiliate thereof, as though it were not the Administrative Agent, the
Collateral Agent or the Issuing Bank (as applicable) under this Credit Agreement
and the other Fundamental Documents.
SECTION 12.8 Independent Investigation by Lenders. Each of the
Lenders acknowledges that it has decided to enter into this Credit Agreement and
the other Fundamental Documents, to make the Loans and to participate in the
Letters of Credit hereunder based on its own analysis of the transactions
contemplated hereby and of the creditworthiness of the Credit Parties and agrees
that neither the Administrative Agent, the Collateral Agent nor the Issuing Bank
shall bear any responsibility therefor.
SECTION 12.9 Agreement of the Lenders. Upon any occasion
requiring or permitting an approval, consent, waiver, election or other action
on the part of the Required Lenders, action shall be taken by the Administrative
Agent or the Collateral Agent for and on behalf of, or for the benefit of, all
Lenders upon the direction of the Required Lenders and any such action shall be
binding on all Lenders. No amendment, modification, consent or waiver shall be
effective except in accordance with the provisions of Section 13.11 hereof.
SECTION 12.10 Notice of Transfer. The Administrative Agent, the
Collateral Agent and the Issuing Bank may deem and treat any Lender which is a
party to this Credit Agreement as the owner of such Lender's respective portions
of the Loans and participations in Letters of Credit for all purposes, unless
and until a written notice of the assignment or transfer thereof executed by any
such Lender shall have been received by the Administrative Agent and shall have
become effective in accordance with Section 13.3 hereof.
SECTION 12.11 Relations Among Lenders. Each Lender in its
capacity as a Lender hereunder agrees that it will not take any legal action,
nor institute any actions or proceedings, against the Borrower or any other
Credit Party hereunder or under any other Fundamental Document, or with respect
to any Collateral or any Real Property Asset, it being understood and agreed
that all such actions are to be taken by the Administrative Agent or the
Collateral Agent (as applicable) on behalf of the Lenders. Without limiting the
generality of the foregoing, no Lender may unilaterally terminate its Commitment
or accelerate, or otherwise enforce or seek to enforce any rights or remedies
with respect to, any Loans or other Obligations owed to it, except statutory or
common law rights of banker's liens and setoff with respect to accounts
maintained with such Lender.
SECTION 12.12 Successor Agents. The Administrative Agent or the
Collateral Agent may resign at any time by giving written notice thereof to the
Lenders and the Borrower, but such resignation shall not become effective until
acceptance by a successor agent of its appointment pursuant hereto. Upon any
such resignation, the retiring Administrative Agent or retiring Collateral Agent
(as applicable) shall promptly appoint a successor agent from among the Lenders;
provided, that such replacement is reasonably acceptable (as evidenced in
writing) to the Required Lenders, the Issuing Bank and the Borrower; provided,
however, that such approval by the Borrower shall not be required at any time
when a Default or Event of Default has occurred and is continuing. If no
successor agent shall have been so appointed by the retiring Administrative
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Agent or retiring Collateral Agent (as applicable) and shall have accepted such
appointment, within 30 days after the retiring agent's giving of notice of
resignation, the Borrower may appoint a successor as agent (provided, that such
successor is reasonably acceptable to the Required Lenders and the Issuing
Bank), which shall be either a Lender or a commercial bank organized under the
laws of the United States of America or of any State thereof and shall have a
combined capital and surplus of at least $250,000,000. Upon the acceptance of
any appointment as Administrative Agent or Collateral Agent (as applicable)
hereunder by a successor agent, such successor agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent or retiring Collateral Agent (as applicable), and
the retiring Administrative Agent or retiring Collateral Agent (as applicable)
shall be discharged from its duties and obligations under this Credit Agreement,
the other Fundamental Documents and any other credit documentation. After any
retiring Administrative Agent's or retiring Collateral Agent's (as applicable)
resignation hereunder as Administrative Agent or Collateral Agent (as
applicable), the provisions of this Article 12 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative Agent
or Collateral Agent (as applicable) under this Credit Agreement and the other
Fundamental Documents.
SECTION 12.13 Tenant's Quiet Enjoyment. Upon the written request
of the Borrower, the Collateral Agent shall deliver a subordination,
non-disturbance and attornment agreement, in favor of the lessee under any lease
of Real Property Assets, in form and substance reasonably satisfactory to the
Collateral Agent and the Borrower, pursuant to which agreement the Collateral
Agent shall agree (to the extent required by the applicable lease or sublease)
(a) to give the tenant or subtenant thereunder the same notice, if any, given to
the Borrower of any default or acceleration of any obligation underlying the
applicable Mortgage or any sale in foreclosure under such Mortgage, (b) to
permit the tenant or subtenant thereunder to cure any such default on the
Borrower's behalf within any applicable cure period, (c) to permit the tenant or
subtenant thereunder to appear by its representative and to bid at any sale in
foreclosure made with respect to the applicable Mortgage and (d) subject to the
terms to be included in the applicable subordination, non-disturbance and
attornment agreement, not to disturb the aforesaid tenant's or subtenant's
possession so long as it is not in default in performing its obligations under
such lease or sublease.
SECTION 12.14 Lender Payments. (a) Except as otherwise provided
herein, all payments by any Lender hereunder shall be made to the Administrative
Agent at the office of Wachovia Bank, National Bank, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Syndication Agency Services (wiring information:
ABA # 053 000 219, Acct. No.: 5000000031359, Account Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc.
Clearing Account, Ref: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc.) not later than 1:00 p.m. (Eastern
time). All payments received after such time shall be deemed received on the
next succeeding Business Day. All payments shall be made in immediately
available funds in lawful money of the United States of America.
(b) If any Agent, the Issuing Bank, any Lender or any other
Secured Party is required at any time to return to the Borrower, or to a
trustee, receiver, liquidator, custodian, or any official under any proceeding
under any Debtor Relief Law, any portion of a payment made by the Borrower, each
such Secured Party shall, on demand of the Collateral Agent, return its share of
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the amount to be returned which is received by the applicable Secured Party,
plus interest thereon from the date of such demand to the date such payment is
made at a rate per annum equal to the Federal Funds Rate.
13. MISCELLANEOUS
SECTION 13.1 Notices. (a) Notices and other communications
provided for herein shall be in writing and shall be delivered addressed:
(i) if to the Administrative Agent and Collateral Agent:
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Syndication Agency Services
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
(ii) if to a Credit Party:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) if to a Lender, to it at its address set forth on
its signature page hereto.
or such other address as such party may from time to time designate by giving
written notice to the other parties hereunder.
Any failure of any Person giving notice pursuant to this Section 13.1, to
provide a courtesy copy to a party as provided herein, shall not affect the
validity of such notice. All notices and other communications given to any party
hereto in accordance with the provisions of this Credit Agreement shall be
deemed to have been given (x) on the fifth Business Day after the date when sent
by registered or certified mail, postage prepaid, return receipt requested, if
by mail, (y) when delivered, if delivered by hand or overnight courier service
or (z) when receipt is acknowledged, if by facsimile communications equipment or
e-mail in each case addressed to such party as provided in this Section 13.1 or
in accordance with the latest unrevoked written direction from such party.
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(b) No notice to or demand on any of the Credit Parties shall
entitle such Credit Party to any other or further notice or demand in the same,
similar or other circumstances.
SECTION 13.2 Survival of Agreement, Representations and
Warranties, etc. All warranties, representations and covenants made by any of
the Credit Parties herein, in any other Fundamental Document or in any
certificate or other instrument delivered by it or on its behalf in connection
with this Credit Agreement or any other Fundamental Document shall be considered
to have been relied upon by the Administrative Agent, the Collateral Agent, the
Issuing Bank and the Lenders and, except for any terminations, amendments,
modifications or waivers thereof in accordance with the terms hereof, shall
survive the execution and delivery of this Credit Agreement, the making of the
Loans and the issuance of the Letters of Credit herein contemplated and the
execution and delivery of any notes evidencing any Loan hereunder regardless of
any investigation made by the Administrative Agent, the Collateral Agent, the
Issuing Bank or the Lenders or on their behalf, and shall continue in full force
and effect so long as any Obligation is outstanding and unpaid and so long as
the Commitments have not been terminated. All statements in any such certificate
or other instrument shall constitute representations and warranties by the
Credit Parties hereunder.
SECTION 13.3 Successors and Assigns; Syndications; Loan Sales;
Participations. (a) Whenever in this Credit Agreement any of the parties hereto
is referred to, such reference shall be deemed to include the successors and
assigns of such party; provided, however, that neither the Borrower nor any
other Credit Party may assign its rights hereunder without the prior written
consent of the Administrative Agent, the Collateral Agent, the Issuing Bank and
all of the Lenders, and all covenants, promises and agreements by or on behalf
of any of the Credit Parties which are contained in this Credit Agreement shall
inure to the benefit of the successors and assigns of the Administrative Agent,
the Collateral Agent, the Issuing Bank and the Lenders.
(b) Each of the Lenders may assign to one or more Lenders or an
Eligible Assignee (but only with the prior written consent of the Administrative
Agent and the Issuing Bank, which consent shall not be unreasonably withheld or
delayed), all or a portion of its interests, rights and obligations under this
Credit Agreement (including, without limitation, all or a portion of any Loans
at the time owing to it, any note held by it evidencing such Loans, or all or a
portion of its Commitment and the same portion of all Loans at the time owing to
it and any notes held by it evidencing its Loans and its obligations with regard
to Letters of Credit); provided, however, that (i) each assignment shall be in a
minimum amount of $2,500,000 (or such lesser amount as shall equal any Lender's
entire Loans or Commitment)), (ii) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register (as defined below), an Assignment and Acceptance
substantially in the form of Exhibit A hereto, together with the assigning
Lender's original note (if any) evidencing the Loans being assigned and a
processing and recordation fee of $3,500 (which fee shall also be payable in the
case of assignments from an assigning Lender to another Lender hereunder) to be
paid to the Administrative Agent by the assigning Lender or the assignee and
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(iii) if the assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall deliver to the Borrower
and the Administrative Agent certification as to the exemption from deduction or
withholding of any United States federal income taxes in accordance with Section
2.15. Upon such execution, delivery, acceptance and recording, from and after
the effective date specified in each Assignment and Acceptance, which effective
date shall not (unless otherwise agreed to by the Administrative Agent) be
earlier than five (5) Business Days after the date of acceptance and recording
by the Administrative Agent, (x) the assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder and under the other Fundamental Documents
and shall be bound by the provisions hereof and (y) the assigning Lender
thereunder shall, to the extent provided in such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Credit
Agreement except that, notwithstanding such assignment, any rights and remedies
available to the Borrower for any breaches by such assigning Lender of its
obligations hereunder while a Lender shall be preserved after such assignment
and such Lender shall not be relieved of any liability to the Borrower due to
any such breach. In the case of an Assignment and Acceptance covering all or the
remaining portion of the assigning Lender's rights and obligations under this
Credit Agreement, such assigning Lender shall cease to be a party hereto.
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby and that such interest is free and clear of any
adverse claim, the assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement or any other
Fundamental Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, any of the other
Fundamental Documents or any other instrument or document furnished pursuant
hereto or thereto; (ii) such assignor Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of any of
the Credit Parties or the performance or observance by any of the Credit Parties
of any of their respective obligations under the Fundamental Documents, the Note
Agreement, the A-Advanced Guaranty or the Subordinated Security Agreement or any
other instrument or document furnished pursuant thereto; (iii) such assignee
confirms that it has received a copy of this Credit Agreement, together with
copies of the most recent financial statements delivered pursuant to Sections
5.1(a), 5.1(b), and 5.1(c) (or if none of such financial statements shall have
then been delivered, then copies of the financial statements referred to in
Section 3.6 hereof) and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee agrees that it will, independently
and without reliance upon the assigning Lender, the Administrative Agent, the
Collateral Agent, the Issuing Bank, any other Lender or any other Secured Party
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Credit Agreement or any of the other Fundamental Documents or any
other instrument or document furnished pursuant thereto; (v) such assignee
appoints and authorizes the Administrative Agent, the Collateral Agent, and the
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Issuing Bank to take such action as agent(s) on its behalf and to exercise such
powers under this Credit Agreement as are delegated to the Administrative Agent,
the Collateral Agent or the Issuing Bank (as applicable) by the terms hereof,
together with such powers as are reasonably incidental thereto; and (vi) such
assignee agrees that it will be bound by the provisions of this Credit Agreement
and the other Fundamental Documents and will perform in accordance with their
terms all of the obligations which by the terms of this Credit Agreement and the
other Fundamental Documents are required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at its address at
which notices are to be given to it pursuant to Section 13.1 hereof a copy of
each Assignment and Acceptance and a register for the recordation of the names
and addresses of the Lenders and the Commitments of, and principal amount of the
Loans owing to, each Lender from time to time (the "Register"), and for purposes
of keeping the Register, the Administrative Agent shall be the Borrower's agent
hereunder. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Credit Parties, the Administrative Agent, the Collateral
Agent, the Issuing Bank and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of the
Fundamental Documents. The Register shall be available for inspection by any
Credit Party or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Subject to the foregoing, upon its receipt of an Assignment
and Acceptance executed by an assigning Lender and an assignee together with the
assigning Lender's original note (if any) evidencing the Loans being assigned
thereby, the processing and recordation fee, and evidence of the Administrative
Agent's and the Issuing Bank's written consent to such assignment (if required),
the Administrative Agent shall, if such Assignment and Acceptance has been
completed and is substantially in the form of Exhibit A hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt written notice thereof to the Borrower. Within
five (5) Business Days after receipt of the notice, the Borrower, at its own
expense, shall execute and deliver to the Administrative Agent, in exchange for
any surrendered note, a new note to the order of such assignee in an amount
equal to the Commitment assumed by the assignee Lender pursuant to such
Assignment and Acceptance and if the assigning Lender has retained a Commitment,
a new note to the order of the assigning Lender in an amount equal to the
Commitment, retained by it hereunder. Such new notes shall be in an aggregate
principal amount equal to the aggregate principal amount of the surrendered note
(or if applicable, the outstanding principal amount of the applicable Loan owed
to the assigning Lender immediately preceding the relevant assignment), shall be
dated the date of the surrendered note and shall otherwise be in substantially
the form of the surrendered note.
(f) Each of the Lenders may, without the consent of any of the
Credit Parties or the Administrative Agent, the Issuing Bank or the other
Lenders, sell participations to one or more banks, mutual funds or other
financial institutions in all or a portion of its rights and obligations under
this Credit Agreement (including, without limitation all or a portion of its
Commitment and the same portion of all Loans (if any) at the time owing to it
and any notes held by it evidencing its Loans and its participation in Letters
of Credit); provided, however, that (i) any such Lender's obligations under this
Credit Agreement shall remain unchanged, (ii) such participant shall not be
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granted any voting rights or any right to control the vote of such Lender under
this Credit Agreement, except that such participant may be granted voting rights
(or a right to control the vote of such Lender under this Credit Agreement) with
respect to (A) proposed decreases to interest rates or fees, (B) subject to
Section 13.11 hereof changes to the amount of the Commitments (except for a
ratable decrease in the Total Commitment of all Lenders, or (C) final maturity
of any Loan and Fees (in each case, as applicable to such participant) and (D)
releases of all or substantially all the Collateral and the Real Property
Assets, (iii) any such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iv) the participating
banks or other entities shall be entitled to the cost protection provisions
contained in Sections 2.12, 2.13, 2.14, 2.15 and 2.18 hereof, but a participant
shall not be entitled to receive pursuant to such provisions an amount larger
than its share of the amount to which the Lender granting such participation
would have been entitled to receive and (v) the Credit Parties, the
Administrative Agent, the Collateral Agent, the Issuing Bank and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's and its participants' rights and obligations under
this Credit Agreement.
(g) A Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
13.3, disclose to the assignee or participant or proposed assignee or
participant, any information relating to any of the Credit Parties furnished to
the Administrative Agent, the Collateral Agent, the Issuing Bank or such Lender
by or on behalf of the Borrower or any other Credit Party; provided, that prior
to any such disclosure, each such assignee or participant or proposed assignee
or participant shall agree in writing to be bound by the provisions of Section
13.17 hereof.
(h) The Credit Parties consent that any Lender may at any time
and from time to time pledge or otherwise grant a security interest in any Loan
or in any Note evidencing the Loans (or any part thereof) to any Federal Reserve
Bank.
(i) Any assignment pursuant to paragraph (b) of this Section 13.3
shall constitute an amendment of the Commitments appearing on the signature
pages hereto as of the effective date of such assignment.
(j) Notwithstanding anything contained in this Sections any
Lender may at any time assign or pledge all or any portion of its rights under
this Agreement without the prior written consent of the Borrower, the Agents or
the Issuing Bank to secure extensions of credit to such Lender or in support of
obligations owed by such Lender; provided that (i) no such assignment or pledge
shall release a Lender from any of its obligations hereunder or substitute any
such assignee for such Lender as a party hereto and (ii) the right of any such
assignee or pledgee to exercise any of such Lender's rights hereunder or to
further transfer all or any portion of the rights pledged or granted to it,
whether by means of foreclosure or otherwise shall at all times be subject to
the other terms and provisions of this Section 13.3. In order to facilitate such
an assignment, the Borrower shall, at the request of the assigning Lender, duly
execute and deliver to the assigning Lender a note or notes evidencing the Loans
made to the Borrower by the assigning Lender hereunder.
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SECTION 13.4 Expenses; Documentary Taxes. Whether or not the
transactions hereby contemplated shall be consummated, the Borrower agrees to
pay (a) all reasonable out-of-pocket expenses incurred by the Administrative
Agent, the Collateral Agent and the Issuing Bank in connection with, or arising
out of, the performance of due diligence, the negotiation, preparation,
execution, delivery, waiver or modification and administration of this Credit
Agreement and any other documentation contemplated hereby, the making of the
Loans and the issuance of the Letters of Credit, the Collateral, the Pledged
Securities, any Real Property Asset or any Fundamental Document, including but
not limited to, the reasonable out-of-pocket costs and internally allocated
charges of one legal counsel or audit or field examinations of the
Administrative Agent, the Collateral Agent and the Issuing Bank in connection
with the administration of this Credit Agreement, the verification of financial
data or the transactions contemplated hereby and the reasonable fees and
disbursements of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the Agents, and any
other counsel that any of the Agents shall retain, (b) the reasonable fees and
disbursements of King & Spalding, counsel for certain of the Lenders and (c) all
reasonable out-of-pocket expenses incurred by the Agents, the Issuing Bank, any
Lender and any other Secured Party in the enforcement or protection (as
distinguished from administration) of the rights and remedies of the Agents, the
Issuing Bank, the Lenders and any other Secured Parties in connection with this
Credit Agreement, the other Fundamental Documents, the Note Agreement, the
A-Advanced Guaranty, the Subordinated Security Agreement, the Letters of Credit
or any notes evidencing the Loans hereunder, or as a result of any transaction,
action or non-action arising from any of the foregoing, including but not
limited to, the reasonable fees and disbursements of any counsel for any of the
Agents, the Issuing Bank, the Lenders or any other Secured Party. Such payments
shall be made on the date this Credit Agreement is executed by the Borrower and
thereafter on demand pursuant to a written invoice delivered to the Borrower at
the notice address set forth herein. The Borrower agrees that it shall indemnify
the Agents, the Issuing Bank, the Lenders and any other Secured Parties from and
hold them harmless against any documentary taxes, assessments or charges made by
any Governmental Authority by reason of the execution and delivery of this
Credit Agreement or any notes evidencing any of the Loans hereunder or the
issuance of Letters of Credit. The obligations of the Borrower under this
Section 13.4 shall survive the Facility Termination Date, the termination of
this Credit Agreement and the payment of the Loans and/or the expiration of the
Letters of Credit.
SECTION 13.5 Indemnity. The Borrower agrees to indemnify and hold
harmless the Agents, the Issuing Bank, the Lenders and any other Secured
Parties, their respective directors, officers, employees, trustees, investments
advisors and agents, and any professionals retained by them (each an
"Indemnified Party") (to the full extent permitted by Applicable Law) from and
against any and all claims, demands, losses, judgments, damages and liabilities
(including liabilities for penalties) incurred by any of them as a result of, or
arising out of, or in any way related to, or by reason of, any investigation,
litigation or other proceeding (whether or not any Indemnified Party is a party
thereto) related to the entering into and/or performance of this Credit
Agreement or any other Fundamental Document or the use of the proceeds of any
Loans hereunder or the issuance of any Letter of Credit or the consummation of
any other transaction contemplated in this Credit Agreement or any other
Fundamental Document, including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
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litigation or other proceeding (but excluding any such losses, liabilities,
claims, damages or expenses of an Indemnified Party to the extent incurred by
reason of the gross negligence or willful misconduct of such Indemnified Party
as determined by a final order or judgment of a court of competent
jurisdiction). The foregoing indemnity agreement includes any reasonable costs
incurred by an Indemnified Party in connection with any action or proceeding
which may be instituted in respect of the foregoing by one of the Agents or the
Issuing Bank or by any other Person either against one of the Agents, the
Issuing Bank or the Lenders or in connection with which any officer or employee
of one of the Agents, the Issuing Bank or the Lenders is called as a witness or
deponent, including, but not limited to, the reasonable fees and disbursements
of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel to the Agents and the Issuing Bank and
any out-of-pocket costs incurred by the Agents, the Issuing Bank, the Lenders or
any other Secured Party in appearing as a witness or in otherwise complying with
legal process served upon them. The obligations of the Borrower under this
Section 13.5 shall survive the Facility Termination Date, the termination of
this Credit Agreement and the payment of the Loans and/or the expiration or
termination of the Letters of Credit and shall inure to the benefit of any
Person who was a Lender notwithstanding such Person's assignment of all its
Loans and its Commitment hereunder.
If a Credit Party shall fail to do any act or thing which it has
covenanted to do hereunder or under a Fundamental Document, or any
representation or warranty of a Credit Party shall be breached, the
Administrative Agent may (but shall not be obligated to) do the same or cause it
to be done or remedy any such breach, and there shall be added to the
Obligations hereunder the cost or expense incurred by the Administrative Agent
in so doing, and any and all amounts expended by the Administrative Agent in
taking any such action shall be repayable to it upon its demand therefor and
shall bear interest at a rate per annum of 2% in excess of the rate then in
effect for Base Rate Loans from time to time in effect from the date advanced to
the date of repayment.
SECTION 13.6 CHOICE OF LAW. THIS CREDIT AGREEMENT, THE OTHER
FUNDAMENTAL DOCUMENTS AND ANY NOTE EVIDENCING ANY OF THE LOANS HEREUNDER SHALL
IN ALL RESPECTS BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES AND BY
FEDERAL LAW TO THE EXTENT APPLICABLE.
SECTION 13.7 WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED
BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES, AND
COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS
CREDIT AGREEMENT, THE SUBJECT MATTER HEREOF, ANY OTHER FUNDAMENTAL DOCUMENT OR
THE SUBJECT MATTER THEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING AND WHETHER IN CONTRACT OR TORT OR OTHERWISE. EACH PARTY HERETO
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ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THE
PROVISIONS OF THIS SECTION 13.7 CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH SUCH
OTHER PARTIES HAVE RELIED, ARE RELYING AND WILL RELY IN ENTERING INTO THIS
CREDIT AGREEMENT AND ANY OTHER FUNDAMENTAL DOCUMENT. ANY PARTY MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 13.7 WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF ANY OTHER PARTY TO THE WAIVER OF ITS RIGHTS TO TRIAL
BY JURY.
SECTION 13.8 WAIVER WITH RESPECT TO DAMAGES. EACH CREDIT PARTY
ACKNOWLEDGES THAT NEITHER THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE
ISSUING BANK, ANY LENDER NOR ANY OTHER SECURED PARTY HAS ANY FIDUCIARY
RELATIONSHIP WITH, OR FIDUCIARY DUTY TO, ANY CREDIT PARTY ARISING OUT OF OR IN
CONNECTION WITH THIS CREDIT AGREEMENT OR ANY OTHER FUNDAMENTAL DOCUMENT AND THE
RELATIONSHIP BETWEEN THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE ISSUING
BANK, THE LENDERS AND ANY OTHER SECURED PARTIES, ON THE ONE HAND, AND THE CREDIT
PARTIES, ON THE OTHER HAND, IN CONNECTION THEREWITH IS SOLELY THAT OF DEBTOR AND
CREDITOR. TO THE EXTENT PERMITTED BY APPLICABLE LAW, NO CREDIT PARTY SHALL
ASSERT, AND EACH CREDIT PARTY HEREBY WAIVES, ANY CLAIMS AGAINST THE
ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE ISSUING BANK, THE LENDERS AND
ANY OTHER SECURED PARTY ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT,
CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES)
ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, THIS CREDIT AGREEMENT,
ANY FUNDAMENTAL DOCUMENT, ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR
THEREBY, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 13.9 No Waiver. No failure on the part of the
Administrative Agent, the Collateral Agent, the Issuing Bank, any Lender or any
other Secured Party to exercise, and no delay in exercising, any right, power or
remedy hereunder, under any note evidencing any Loan hereunder, with regard to
any Letter of Credit, or any other Fundamental Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. All remedies hereunder are cumulative and
are not exclusive of any other remedies provided by law.
SECTION 13.10 Extension of Payment Date. Except as otherwise
specifically provided in Article 2 hereof, should any payment or prepayment of
principal of or interest on any of the Loans or any other amount due hereunder,
become due and payable on a day other than a Business Day, the due date of such
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payment or prepayment shall be extended to the next succeeding Business Day and,
in the case of a payment or prepayment of principal, interest shall be payable
thereon at the rate herein specified during such extension.
SECTION 13.11 Amendments, etc. (a) Unless otherwise specifically
provided herein any provision of this Credit Agreement may be amended or waived
if, but only if, such amendment or waiver is in writing and is signed by the
Credit Parties and the Required Lenders, subject to clause (c) below (and, if
the rights or duties of either of the Agents are affected thereby, by the
applicable Agent); provided, that no such amendment or waiver shall (i) increase
or decrease the Commitment of any Lender, without the prior written consent of
such Lender, (ii) reduce the principal of, or rate of interest on, any Loan or
any Fees specified herein, due to a Lender without the prior written consent of
such Lender, (iii) postpone the date fixed for any payment of principal of, or
interest on, any Loan or any Fees hereunder due to a Lender or for any reduction
or termination of the Commitment of a Lender, without the prior written consent
of each such Lender, (iv) increase the amount of the Loans of a Lender, without
the prior written consent of such Lender, (v) decrease any amount payable to a
Lender pursuant to the provisions of Section 12.2 hereof, without the prior
written consent of each such Lender, (vi) release all or substantially all of
the Collateral and the Real Property Assets from the Liens created by the
Fundamental Documents (except as expressly permitted hereby), without the prior
written consent of all the Lenders, (vii) amend or modify the provisions of this
Section 13.11, without the prior written consent of all the Lenders, (viii)
amend the definition of "Required Lenders," without the prior written consent of
all the Lenders or (ix) amend or modify any provision of this Agreement which
expressly provides for the unanimous consent or approval of the Lenders. No such
amendment, modification, waiver or consent shall amend Section 2.18 hereof or
adversely affect the rights and obligations of the Issuing Bank hereunder
without its prior written consent. Each holder of a Commitment, a Loan or a note
evidencing any Loan hereunder shall be bound by any amendment, modification,
waiver or consent authorized as provided herein (whether or not any applicable
note shall have been marked to indicate such amendment, modification, waiver or
consent); and any consent by any holder of a Commitment, a Loan or a note shall
bind any Person subsequently acquiring such Commitment, Loan or note (whether or
not any applicable note is so marked).
(b) Notwithstanding the foregoing provisions of this Section
13.11 or anything to the contrary contained in this Credit Agreement, any Lender
which has requested that it not receive material, non-public information
concerning the Borrower or any of the other Credit Parties and which is
therefore unable or unwilling to vote with respect to an issue arising under
this Credit Agreement will agree to vote and will be deemed to have voted its
Credit Exposure under this Credit Agreement pro rata in accordance with the
percentage of Credit Exposure voted in favor of, and the percentage of Credit
Exposure voted against, any such issue under this Credit Agreement.
(c) By their signatures below, each of the Lenders hereby
covenants and agrees that notwithstanding anything to the contrary herein from
and after the Closing Date until the one year anniversary of the Closing Date,
solely for the purposes of any determination of the Required Lenders for
purposes of amendments, waivers or consents as specified in this Section 13.11,
the Credit Exposure of any one Lender shall in no event be deemed to constitute
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in excess of 50% of the Total Credit Exposure and the amount of any such
Lender's Credit Exposure in excess of 50% of the Total Credit Exposure shall be
deemed to be held by the other Lenders, respectively, on a pro rata basis in
accordance with such other Lenders' respective Credit Exposure.
SECTION 13.12 Severability. Any provision of this Credit
Agreement or of any note evidencing any Loan hereunder which is invalid, illegal
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without invalidating the remaining provisions hereof, and any such invalidity,
illegality or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 13.13 SERVICE OF PROCESS. EACH PARTY HERETO (EACH A
"SUBMITTING PARTY") HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE STATE
COURTS OF THE STATE OF NEW YORK IN NEW YORK COUNTY AND TO THE JURISDICTION OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK SITTING
IN NEW YORK COUNTY, FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING
ARISING OUT OF OR BASED UPON THIS CREDIT AGREEMENT (INCLUDING, BUT NOT LIMITED
TO, THE LETTERS OF CREDIT, THE SUBJECT MATTER HEREOF AND ANY OTHER FUNDAMENTAL
DOCUMENT AND THE SUBJECT MATTER THEREOF). EACH SUBMITTING PARTY TO THE EXTENT
PERMITTED BY APPLICABLE LAW (A) HEREBY WAIVES, AND AGREES NOT TO ASSERT, BY WAY
OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR OTHER
PROCEEDING BROUGHT IN THE ABOVE-NAMED COURTS, ANY CLAIM THAT IT IS NOT SUBJECT
PERSONALLY TO THE JURISDICTION OF SUCH COURTS, THAT ITS PROPERTY IS EXEMPT OR
IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE SUIT, ACTION OR PROCEEDING IS
BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR
PROCEEDING IS IMPROPER OR THAT THIS CREDIT AGREEMENT, THE SUBJECT MATTER HEREOF
AND ANY OTHER FUNDAMENTAL DOCUMENT OR THE SUBJECT MATTER THEREOF (AS APPLICABLE)
MAY NOT BE ENFORCED IN OR BY SUCH COURT AND (B) HEREBY WAIVES THE RIGHT TO
ASSERT IN ANY SUCH ACTION, SUIT OR PROCEEDING ANY OFFSETS OR COUNTERCLAIMS
EXCEPT COUNTERCLAIMS THAT ARE COMPULSORY OR OTHERWISE ARISE FROM THE SAME
SUBJECT MATTER. EACH SUBMITTING PARTY HEREBY CONSENTS TO SERVICE OF PROCESS BY
MAIL AT THE ADDRESS TO WHICH NOTICES ARE TO BE GIVEN TO IT PURSUANT TO SECTION
13.1 HEREOF. EACH SUBMITTING PARTY AGREES THAT ITS SUBMISSION TO JURISDICTION
AND CONSENT TO SERVICE OF PROCESS BY MAIL IS MADE FOR THE EXPRESS BENEFIT OF
EACH OF THE OTHER SUBMITTING PARTIES. FINAL JUDGMENT AGAINST ANY SUBMITTING
PARTY IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE, AND MAY BE
ENFORCED IN ANY OTHER JURISDICTION (X) BY SUIT, ACTION OR PROCEEDING ON THE
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JUDGMENT, A CERTIFIED OR TRUE COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE
FACT AND OF THE AMOUNT OF INDEBTEDNESS OR LIABILITY OF THE SUBMITTING PARTY
THEREIN DESCRIBED OR (Y) IN ANY OTHER MANNER PROVIDED BY OR PURSUANT TO THE LAWS
OF SUCH OTHER JURISDICTION; PROVIDED, HOWEVER, THAT THE ADMINISTRATIVE AGENT,
THE COLLATERAL AGENT AND THE ISSUING BANK MAY AT THEIR OPTION BRING SUIT, OR
INSTITUTE OTHER JUDICIAL PROCEEDINGS AGAINST A SUBMITTING PARTY OR ANY OF ITS
ASSETS IN ANY ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ OR OF ANY COUNTRY OR
PLACE WHERE THE SUBMITTING PARTY OR SUCH ASSETS MAY BE FOUND.
SECTION 13.14 Headings. Section headings used herein and the
Table of Contents are for convenience only and are not to affect the
construction of or be taken into consideration in interpreting this Credit
Agreement.
SECTION 13.15 Execution in Counterparts. This Credit Agreement
may be executed in any number of counterparts, each of which shall constitute an
original, but all of which taken together shall constitute one and the same
instrument. Signature pages may be detached from counterpart documents and
reassembled to form duplicate executed originals. Delivery of an executed
signature page to this Credit Agreement by facsimile shall be as effective as
delivery of a manually executed counterpart of this Credit Agreement.
SECTION 13.16 Subordination of Intercompany Indebtedness,
Receivables and Advances. (a) Each Credit Party hereby agrees that any
intercompany Indebtedness or other intercompany receivables or intercompany
advances of any other Credit Party, directly or indirectly, in favor of such
Credit Party of whatever nature at any time outstanding shall be completely
subordinate in right of payment to the prior indefeasible payment in full of the
Obligations, and that no payment on any such Indebtedness, receivable or advance
shall be made until the prior indefeasible payment in full of all the
Obligations, termination of the Commitments and the expiration and/or
termination of all Letters of Credit (or the cash collateralization of the
outstanding Letters of Credit in an amount equal to 105% of the then current L/C
Exposure) (i) except intercompany receivables and intercompany advances
permitted pursuant to the terms hereof may be repaid and intercompany
Indebtedness permitted pursuant to the terms hereof may be repaid, in each case
so long as no Default or Event of Default, shall have occurred and be continuing
and (ii) except as specifically consented to by the Administrative Agent and the
Required Lenders in writing.
(b) In the event that any payment on any such Indebtedness shall
be received by such Credit Party other than as permitted by Section 13.16(a)
hereof before payment in full of all Obligations, termination of the Commitments
and the expiration and/or termination of all Letters of Credit (or the cash
collateralization of the outstanding Letters of Credit in an amount equal to
105% of the then current L/C Exposure), such Credit Party shall receive such
payments and hold the same in trust for, segregate the same from its own assets
and shall immediately pay over to, the Collateral Agent on behalf of the Secured
Parties all such sums to the extent necessary so that the Secured Parties shall
have been paid all Obligations owed or which may become owing.
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SECTION 13.17 Confidentiality. Each of the Lenders understands
that some of the information furnished to it pursuant to this Credit Agreement
may be received by it prior to the time that such information shall have been
made public, and each of the Lenders hereby agrees that it will keep all the
information received by it in connection with this Credit Agreement confidential
except that a Lender shall be permitted to disclose information (i) to such of
its officers, directors, employees, agents, representatives, auditors,
consultants, advisors, trustees, investments advisors, lawyers and affiliates as
need to know such information in connection with this Credit Agreement or any
other Fundamental Document; (ii) to a proposed assignee or participant in
accordance with Section 13.3(g) hereof; (iii) to the extent required by
Applicable Law and regulations or by any subpoena or other legal process (in any
which event such Lender shall promptly notify the Borrower to the extent not
prohibited by Applicable Law); (iv) to the extent requested by any bank
regulatory authority or other regulatory authority; (v) to the extent such
information (A) becomes publicly available other than as a result of a breach of
this Credit Agreement, (B) becomes available to such Lender on a nonconfidential
basis from a source other than the Borrower or any of its Affiliates, which
source is not known to such Lender to be prohibited from transmitting the
information to such Lender by any contractual or other obligation to the
Borrower or (C) was available to such Lender on a nonconfidential basis prior to
its disclosure to such Lender; (vi) to the extent the Borrower shall have
consented to such disclosure in writing; or (vii) in connection with the
servicing of the Loans hereunder, in protecting or enforcing any rights and/or
remedies in connection with any Fundamental Document or in any proceeding in
connection with any Fundamental Document or any of the transactions contemplated
thereby.
SECTION 13.18 Entire Agreement. This Credit Agreement (including
the Exhibits and Schedules hereto) represents the entire agreement of the
parties with regard to the subject matter hereof and the terms of any letters
and other documentation entered into between any of the parties hereto (other
than the Fee Letters) prior to the execution of this Credit Agreement which
relate to Loans to be made or Letters of Credit to be issued hereunder shall be
replaced by the terms of this Credit Agreement.
SECTION 13.19 Enforcement of Rights; No Obligation to ▇▇▇▇▇▇▇▇
Assets. In enforcing any rights under this Credit Agreement or any other
Fundamental Document, neither the Agents, the Issuing Bank, any Lender nor any
of the other Secured Parties shall be required to resort to any particular
security, right or remedy through foreclosure or otherwise, or to proceed in any
particular order of priority, or to otherwise act or refrain from acting; and,
to the extent permitted by Applicable Law, each Credit Party hereby waives and
releases any right to a marshaling of assets or a sale in inverse order of
alienation.
SECTION 13.20 Reproduction of Documents. The Credit Agreement,
all documents constituting Schedules or Exhibits hereto, and all documents
relating hereto received by a party hereto, including, without limitation: (a)
consents, waivers and modifications that may hereafter be executed; (b) the
Fundamental Documents, the Note Agreement, the A-Advanced Guaranty and the
Subordinated Security Agreement; and (c) financial statements, certificates, and
other information previously or hereafter furnished to either of the Agents, the
Issuing Bank, any Lender or any other Secured Party may be reproduced by the
126
party receiving the same by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. Each of the parties
hereto agrees and stipulates that, to the extent permitted by Applicable Law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such party in the
regular course of business) and that, to the extent permitted by applicable law,
any enlargement, facsimile, or further reproduction of such reproduction shall
likewise be admissible in evidence.
SECTION 13.21 Right of Set-Off. Subject to Section 12.3 upon the
occurrence and during the continuance of any Event of Default, the
Administrative Agent and each Lender is hereby authorized at any time and from
time to time, to the fullest extent permitted by law and without order of or
application to any court, to set-off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Administrative Agent and each such Lender
to or for the credit or the account of any Credit Party against any and all of
the Obligations, irrespective of whether or not such Lender shall have made any
demand under any Fundamental Document and although the Obligations may not have
been accelerated. The rights of each Lender and the Administrative Agent under
this Section are in addition to other rights and remedies which such Lender and
the Administrative Agent may have upon the occurrence and during the continuance
of any Event of Default.
[SIGNATURE PAGES FOLLOW]
127
BORROWER:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Interim Chief Financial Officer
GUARANTORS:
CURTAINS AND FABRICS, INC.
GOLD ▇▇▇▇▇, INC.
RASCHEL FASHION INTERKNITTING, LTD.
GFD FABRICS, INC.
GFD SERVICES, INC.
MEXICAN INDUSTRIES OF NORTH
CAROLINA, INC.
▇▇▇▇▇▇▇ LACES, LTD.
ADVISORY RESEARCH SERVICES, INC.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (MICHIGAN), INC.
GUILFORD AIRMONT, INC.
GOLDMILLS FARMS, INC.
GMI COMPUTER SALES, INC.
TWIN RIVERS TEXTILE PRINTING &
FINISHING
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Interim Chief Financial Officer
128
AGENT AND LENDERS:
WACHOVIA BANK, NATIONAL ASSOCIATION,
INDIVIDUALLY AND AS ADMINISTRATIVE
AGENT, COLLATERAL AGENT AND ISSUING
BANK
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
Address: Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Syndication Agency Services
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
BANK ONE, NA
By: /s/ C. ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
Name: C. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: First Vice President
Address: Bank One, NA
Managed Assets Dept. TX1-2454
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: C. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
129
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Risk Manager
Address: c/o Commercial Finance
▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address: The Prudential Insurance Company of America
c/o Prudential Capital Group
Four ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Trade Management Group
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Address: c/o Prudential Capital Group
Corporate and Project Workouts
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Managing Director
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
130
EXHIBIT A
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated ___________
Reference is made to the Credit, Security, Guaranty and Pledge
Agreement dated as of October 1, 2002 (as the same may be amended, amended and
restated, supplemented or otherwise modified, renewed or replaced from time to
time, the "Credit Agreement") among ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc., as borrower (the
"Borrower"), the Guarantors referred to therein, the Lenders referred to therein
(the "Lenders") and Wachovia Bank, National Association, as Administrative
Agent, Collateral Agent and Issuing Bank. Capitalized terms used herein and not
otherwise defined shall have the meanings given to such terms in the Credit
Agreement.
____________________ (the "Assignor") and ____________ (the
"Assignee") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, an undivided
___% interest in and to all the Assignor's interests, rights and obligations
under the Credit Agreement, effective as of the Effective Date (such term being
used herein as hereinafter defined) in the amounts and percentages set forth
below of (a) the Commitment(s) of the Assignor on the Effective Date set forth
below, (b) the outstanding Loans owing to the Assignor on the Effective Date set
forth below, together with all unpaid interest accrued thereon to the Effective
Date set forth below, [(C) THE ASSIGNOR'S PARTICIPATIONS IN OUTSTANDING LETTERS
OF CREDIT AS OF THE EFFECTIVE DATE AND/OR (D) THE ASSIGNOR'S PRO RATA SHARE OF
THE L/C EXPOSURE SET FORTH BELOW]; provided, however, it is expressly understood
and agreed that (x) the Assignor is not assigning to the Assignee and the
Assignor shall retain (i) all of the Assignor's rights under Sections 2.12,
2.13, 2.14, 2.15(e) and 2.18(g) of the Credit Agreement with respect to any
cost, reduction or payment incurred or made prior to the Effective Date and (ii)
any and all amounts paid to the Assignor prior to the Effective Date and (y)
both Assignor and Assignee shall be entitled to the benefits of Sections 13.4
and 13.5 of the Credit Agreement.
(1) (2) (3)
Facility Amount held Amount being
by Assignor 1/ assigned pursuant
-- hereto
------------------------------ ------------------------------ ------------------------------
Commitment $ $ 2/
--
Outstanding L/C Exposure
Participations in Outstanding
Letters of Credit
2. The Assignor (i) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Fundamental
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Fundamental Documents or any other instrument or
document furnished pursuant thereto, other than that it is the legal and
beneficial owner of the interest being assigned by it hereby and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any of the Credit Parties or the performance or observance by any of the
Credit Parties of any of their obligations under the Fundamental Documents or
any other instrument or document furnished pursuant thereto; and (iii) attaches
any notes held by it and requests that the Administrative Agent exchange such
notes for new notes payable to the Assignor (if the Assignor has retained any
Commitments and/or Loans under the Credit Agreement) and new notes payable to
the Assignee, in the respective amount(s) which reflect the assignment being
made hereby (and after giving effect to any other assignments which have become
effective on the Effective Date).
3. The Assignee (i) represents and warrants that it is an Eligible
Assignee and is legally authorized to enter into this Assignment and Acceptance;
(ii) confirms that it has received a copy of the Credit Agreement, together with
copies of the most recent financial statements delivered pursuant to Sections
5.1 (a), (b) and (c) thereof (if none of such statements shall have theretofore
been delivered then copies of financial statements referred to in Section 3.6
thereof) and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance; (iii) agrees that it will, independently and without reliance upon
the Assignor, the Administrative Agent, the Collateral Agent, the Issuing Bank,
or any other Lender or any other Secured Party and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
1/ Calculated after giving effect to all assignments of the Commitments
and the Loans that will be effective prior to the Effective Date. -
2/ Except with respect to assignments to an Affiliate of a Lender, the
Commitment and Loans must be a minimum amount of $2,500,000 (or 100%
thereof, - if such Commitments/Loans outstanding being assigned are
less than $2,500,000).
2
credit decisions in taking or not taking action under the Credit Agreement or
any other Fundamental Document; (iv) appoints and authorizes the Administrative
Agent, the Collateral Agent and the Issuing Bank to take such action as agent on
its behalf and to exercise such powers under the Credit Agreement and the other
Fundamental Documents as are delegated to the Administrative Agent, the
Collateral Agent, the Collateral Monitoring Agent or the Issuing Bank by the
terms thereof, together with such powers as are reasonably incidental thereto;
(v) agrees that it will keep confidential all information with respect to the
Credit Parties furnished to it by the Administrative Agent, the Collateral
Agent, the Issuing Bank, the Credit Parties, or the Assignor in accordance with
Sections 13.3(g) and 13.17 of the Credit Agreement; (vi) agrees that it will be
bound by the provisions of the Credit Agreement and will perform in accordance
with their terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Lender; and (vii) attaches the
forms prescribed by the Internal Revenue Service of the United States certifying
as to the Assignee's status for purposes of determining exemption from United
States withholding taxes with respect to all payments to be made to the Assignee
under the Credit Agreement or such other documents as are necessary to indicate
that all such payments are subject to such tax at a rate reduced by any
applicable tax treaty3/.
4. The effective date for this Assignment and Acceptance shall be
________________ (the "Effective Date").4/ Following the execution of this
Assignment and Acceptance by the Assignee and the Assignor, it will be delivered
(together with the Assignor's original notes (if any) evidencing the Loans being
assigned and the processing and recording fee of [$3,500] to be paid to the
Administrative Agent) to the Administrative Agent for the consent of the
Administrative Agent, the Issuing Bank (to the extent required by the Credit
Agreement)5/ and the Borrower6 and for acceptance and recording by the
Administrative Agent pursuant to Section 13.3 of the Credit Agreement.
5. Upon such receipt of such consents (to the extent necessary) and
acceptance and recording, from and after the Effective Date, (i) the Assignee
shall be a party to the Credit Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations under the Credit
Agreement and the other Fundamental Documents of a Lender and, if such LendeR
_______________________________
3/ If the Assignee is organized under the laws of a jurisdiction outside
the United States. -
4/ Such date shall not (unless otherwise agreed to by the Administrative
Agent) be earlier than five (5) Business Days after the date of
acceptance - and recording by the ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
▇/ ▇▇▇▇ of the foregoing parties' consent is required for assignments to
an Affiliate of a Lender. -
6/ Such consent of the Borrower shall not be required if on the
Effective Date a Default or an Event of Default has occurred and is
continuing. -
3
were an Issuing Bank, of such Issuing Bank and shall be bound by the provisions
thereof and (ii) the Assignor shall, to the extent provided in this Assignment
and Acceptance, relinquish its rights and, except in the case of an assignment
to an Affiliate of a Lender, be released from its obligations under the Credit
Agreement (and if this Assignment and Acceptance covers all or the remaining
portion of the Assignor's rights and obligations under the Credit Agreement, the
Assignor shall cease to be a party thereto).
6. Upon the acceptance and recording by the Administrative Agent,
from and after the Effective Date, the Administrative Agent shall make all
payments in respect of the interest assigned hereby (including payments of
principal, interest, fees and other amounts) to the Assignee whether such
amounts have accrued prior to the Effective Date or accrue subsequent to the
Effective Date. The Assignor and Assignee shall make all appropriate adjustments
in payments made by the Administrative Agent for periods prior to the Effective
Date or with respect to the making of this assignment directly between
themselves.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE CONSTRUED IN ACCORDANCE
WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK.
8. In the event of a conflict between this Assignment and Acceptance
and the Credit Agreement, the provisions of the Credit Agreement will govern.
9. This Assignment and Acceptance may be executed in counterparts,
each of which shall be deemed to constitute an original, but all of which when
taken together shall constitute one and the same instrument. Delivery of an
executed counterpart of this Assignment and Acceptance by telecopier shall be
effective as delivery of a manually executed counterpart of this Assignment and
Acceptance.
[SIGNATURE PAGES FOLLOW]
4
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be duly executed by their respective duly
authorized officers.
[NAME OF ASSIGNOR]
By
-------------------------------------
Name:
Title:
[NAME OF ASSIGNEE]
By
-------------------------------------
Name:
Title:
5
CONSENTED TO:
WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent
By
-------------------------------------
Name:
Title:
[ ], as Issuing Bank*/
-
By
-------------------------------------
Name:
Title:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC. as Borrower**
--
By
-------------------------------------
Name:
Title:
___________________________
*/ Signature only required if the Assignor is assigning a Revolving
- Credit Commitment or Revolving Credit Loans.
**/ Signature not required if a Default or an Event of Default has
-- occurred and is continuing or if Assignee is an Affiliate of the
Assignor or a Related Fund.
6
EXHIBIT B-1
FORM OF BORROWING CERTIFICATE
Each of the undersigned HEREBY CERTIFIES with respect to the
Borrowing to be made on the date indicated below pursuant to that certain
Credit, Security, Guaranty and Pledge Agreement dated as of October 1, 2002,
among ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc., as borrower (the "Borrower"), the Guarantors
referred to therein, the Lenders referred to therein (the "Lenders") and
Wachovia Bank, National Association, as Administrative Agent, Collateral Agent
and Issuing Bank (as such agreement may be amended, amended and restated,
supplemented or otherwise modified, renewed or replaced from time to time, the
"Credit Agreement"; capitalized terms used but not otherwise defined herein
shall have the meanings assigned to them in the Credit Agreement) that:
(a) the proceeds of the Borrowing are to be deposited into the
following account:
[insert name of bank]
[INSERT ADDRESS]
Account No.:
ABA No.:
References:
(b) the representations and warranties contained in the Credit
Agreement and in the other Fundamental Documents are true and correct in all
material respects on and as of the date hereof (except to the extent that such
representations and warranties expressly relate to an earlier date) with the
same effect as if made on and as of the date hereof;
(c) no Default or Event of Default has occurred or is continuing, nor
shall any such event occur by reason of the making of the Loan(s) requested
herein, unless a waiver thereof by prior written consent has been granted by the
Required Lenders;
(d) the Borrower requests the following Loan(s) on the terms and
conditions stated in the Credit Agreement and any related notes:
(i) the requested Business Day of the Loan(s) is
__________; and
(ii) the Interest Rate Type of the Loan(s) requested [BASE
RATE LOAN OR EURODOLLAR LOAN], the amounts thereof and the Interest
Period(s) [IF A EURODOLLAR LOAN IS REQUESTED], are as follows:
INTEREST RATE TYPE INTEREST PERIOD AMOUNT
------------------ --------------- ------
(e) the Borrowing Base on [INSERT DATE] was $_________________ as
indicated on the most recent Borrowing Base Certificate delivered to the Agents,
the Issuing Bank and the Lenders pursuant to the Credit Agreement;
(f) after giving effect to the Loans requested hereby, the aggregate
principal amount outstanding of all Loans plus the then current L/C Exposure
does not exceed the Maximum Credit Amount; and
2
IN WITNESS WHEREOF, the undersigned have caused this certificate to
be executed this __ day of ______________.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
By:
-------------------------------------
Name:
Title:
3
Exhibit B-2
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
Form of Borrowing Base Certificate
As of October 1, 2002
($ in 000s)
A. Available Accounts Receivable 0
----------------
B. Available Inventory 1/ 0
----------------
C. Borrowing Base (Lines A + B) 0
----------------
D. Borrowing Base Less Liquidity Requirement 0
----------------
E. Facility Amount 0
----------------
F. Lesser of Lines D & E 0
----------------
G. Aggregate Principal Amount Outstanding 0
----------------
H. Letters of Credit Outstanding 0
----------------
I. Aggregate Outstanding Amount (Lines G + H) 0
----------------
J. Facility Available / (Overadvance) (F-I) 0
----------------
OFFICERS CERTIFICATION:
Pursuant to the Credit, Security, Guaranty and Pledge Agreement dated as of
October 1, 2002 (capitalized terms used herein shall have the meaning assigned
to such terms in the Credit Agreement), the undersigned certifies that the
information provided in this certificate to Wachovia Bank, National Association,
as Administrative Agent, is accurate and complete based on the accounting
records of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc.
--------------------------------------------- ----------------
Signature & Title Date
1/ Prior to Administrative Agent's receipt of the Hillco
Appraisal in form and substance satisfactory to the
Administrative Agent, Available Inventory included in the
Borrowing Base shall be capped at $5,000,000
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
FORM OF BORROWING BASE CERTIFICATE
AS OF OCTOBER 1, 2002
▇. ▇▇▇▇▇ Domestic Accounts Receivable Per Aging
--------------
Less Ineligibles:
Intercompany
--------------
> 60 days past due
--------------
Past Due Credits
--------------
Contra Accounts
--------------
Cross Aged 50%
--------------
Foreign Accounts
--------------
Chargebacks / Disputed Claims
--------------
Foreign Credit Insurance
--------------
Invoices > 90 DOI, > 60 Past Due
--------------
Guilford Altamira MX Customers
--------------
Other 0
--------------
B. Total Ineligibles 0
==============
C. Credit Memo Lag Reserve
--------------
D. Eligible Accounts Receivable, net of
Credit Memo Lag Reserve 0
--------------
E. Advance Rate 80%
--------------
F. Total A/R Availability 0
================
Account of foreign subsidiaries are not included in the Borrowing Base.
Accordingly, the Altamira Accounts that are included in the Borrower's and
Guarantor's aging are excluded.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
Automotive
Form of Borrowing Base Certificate
As of October 1, 2002
RAW WORK FINISHED
MATERIALS IN PROCESS GOODS
--------------- --------------- ---------------
Gross Inventory
--------------- --------------- ---------------
Less Reserves
Reserve for Shrink
--------------- --------------- ---------------
FIFO Reserves (1)
--------------- --------------- ---------------
LIFO Reserves
--------------- --------------- ---------------
TOTAL RESERVES 0 0 0
--------------- --------------- ---------------
Less: Capitalized Variances
--------------- --------------- ---------------
Net Inventories 0 0 0
--------------- --------------- ---------------
Less Ineligibles:
In-transit
--------------- --------------- ---------------
Goods at Vendor w/o Landlord Waiver
--------------- --------------- ---------------
Second Quality
--------------- --------------- ---------------
Goods > 12 Months Old
--------------- --------------- ---------------
Supplies and Direct Materials
--------------- --------------- ---------------
Other Ineligibles
--------------- --------------- ---------------
Total Ineligibles 0 0 0
--------------- --------------- ---------------
ELIGIBLE INVENTORY 0 0 0
--------------- --------------- ---------------
Advance Rate 30% 25% 50%
--------------- --------------- ---------------
AVAILABLE INVENTORY 0 0 0
=============== =============== ===============
TOTAL AVAILABLE ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ INVENTORY 0
===============
(1) Reserves are for slow moving and obsolescence inventory
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
Fibers
Form of Borrowing Base Certificate
As of October 1, 2002
RAW WORK FINISHED
MATERIALS IN PROCESS GOODS
--------------- -------------- ---------------
Gross Inventory 0 0 0
--------------- -------------- ---------------
Less Reserves
Reserve for Shrink
--------------- -------------- ---------------
FIFO Reserves (1)
--------------- -------------- ---------------
LIFO Reserves
--------------- -------------- ---------------
TOTAL RESERVES 0 0 0
--------------- -------------- ---------------
Less: Capitalized Variances 0 0
--------------- -------------- ---------------
Net Inventories 0 0 0
--------------- -------------- ---------------
Less Ineligibles:
In-transit
--------------- -------------- ---------------
Goods at Vendor w/o Landlord Waiver
--------------- -------------- ---------------
Second Quality
--------------- -------------- ---------------
Goods > 12 Months Old
--------------- -------------- ---------------
Supplies and Direct Materials
--------------- -------------- ---------------
Other Ineligibles
--------------- -------------- ---------------
Total Ineligibles 0 0 0
--------------- -------------- ---------------
ELIGIBLE INVENTORY 0 0 0
--------------- -------------- ---------------
Advance Rate 40% 0% 30%
--------------- -------------- ---------------
AVAILABLE INVENTORY 0 0 0
=============== ============== ===============
TOTAL AVAILABLE ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ INVENTORY 0
===============
(1) Reserves are for slow moving and obsolescence inventory
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
TECHNICAL TEXTILE
FORM OF BORROWING BASE CERTIFICATE
AS OF OCTOBER 1, 2002
RAW WORK FINISHED
MATERIALS IN PROCESS GOODS
--------------- ---------------- ----------------
Gross Inventory 0 0 0
--------------- ---------------- ----------------
Less Reserves
Reserve for Shrink 0 0 0
--------------- ---------------- ----------------
FIFO Reserves (1) 0 0 0
--------------- ---------------- ----------------
LIFO Reserves
--------------- ---------------- ----------------
TOTAL RESERVES 0 0 0
--------------- ---------------- ----------------
Less: Capitalized Variances 0 0 0
--------------- ---------------- ----------------
Net Inventories 0 0 0
--------------- ---------------- ----------------
Less Ineligibles:
In-transit
--------------- ---------------- ----------------
Goods at Vendor w/o Landlord Waiver 0
--------------- ---------------- ----------------
Second Quality
--------------- ---------------- ----------------
Goods > 12 Months Old
--------------- ---------------- ----------------
Supplies and Direct Materials 0
--------------- ---------------- ----------------
Other Ineligibles
--------------- ---------------- ----------------
Total Ineligibles 0 0 0
--------------- ---------------- ----------------
ELIGIBLE INVENTORY 0 0 0
--------------- ---------------- ----------------
Advance Rate 30% 25% 40%
--------------- ---------------- ----------------
AVAILABLE INVENTORY 0 0 0
=============== ================ ================
TOTAL AVAILABLE ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ INVENTORY 0
================
(1) Reserves are for slow moving and obsolescence inventory
----------------------------------------------------------------------------------------------
Advance Rates on Eligible Inventory
----------------------------------------------------------------------------------------------
RAW MATERIALS WORK-IN-PROCESS FINISHED GOODS
-------------------- -------------------- --------------------
Automotive 30% 25% 50%
Fibers 40% 0% 30%
Technical Textile 30% 25% 40%
----------------------------------------------------------------------------------------------
EXHIBIT C
FORM OF INSTRUMENT OF ASSUMPTION AND JOINDER
ASSUMPTION AND JOINDER AGREEMENT dated as of ___________ (the
"Assumption Agreement") made by [INSERT NAME OF NEW CREDIT PARTY], a [INSERT
STATE OF ORGANIZATION] [CORPORATION, LIMITED PARTNERSHIP OR LIMITED LIABILITY
COMPANY] (the "Company") in favor of the lenders (the "Lenders") referred to in
that certain Credit, Security, Guaranty and Pledge Agreement dated as of October
1, 2002 (as such agreement may be amended, amended and restated, supplemented or
otherwise modified, renewed or replaced from time to time, the "Credit
Agreement") among ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc., as borrower (the "Borrower"), the
Guarantors referred to therein (the "Guarantors"), the Lenders and Wachovia
Bank, National Association, as Administrative Agent, Collateral Agent and
Issuing Bank. Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Credit Agreement.
W I T N E S S E T H
The Company is a [INSERT STATE OF ORGANIZATION] [CORPORATION, LIMITED
PARTNERSHIP OR LIMITED LIABILITY COMPANY], and is a subsidiary of [INSERT NAME
OF CREDIT PARTY]. Pursuant to Section 5.12 of the Credit Agreement, the Company
is required to execute this document as a newly [FORMED] [ACQUIRED] subsidiary
of [INSERT NAME OF CREDIT PARTY].
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt of which is hereby acknowledged, the Company
hereby agrees as follows:
1. Assumption and Joinder.
(a) The Company hereby expressly confirms that it has
assumed, and hereby agrees to perform and observe, each and every one of the
covenants, rights, promises, agreements, terms, conditions, obligations,
appointments, duties and liabilities of (i) a Guarantor under the Credit
Agreement and all the other Fundamental Documents (as defined in the Credit
Agreement) applicable to it as a Guarantor [AND A PLEDGOR], and (ii) a
Contributor (as such term is defined in the Contribution Agreement) under the
Contribution Agreement. By virtue of the foregoing, the Company hereby accepts
and assumes any liability of (x) a Guarantor, [A PLEDGOR], and/or a Credit Party
related to each representation or warranty, covenant or obligation made by a
Guarantor, [A PLEDGOR], and/or a Credit Party in the Credit Agreement or any
other Fundamental Document and hereby expressly affirms, as of the date hereof,
each of such representations, warranties, covenants and obligations, and (y) a
Contributor related to each covenant or obligation made by a Contributor in the
Contribution Agreement and hereby expressly affirms, as of the date hereof, each
of such covenants and obligations.
(b) All references to the term "Guarantor", ["PLEDGOR"], or
"Credit Party" in the Credit Agreement or any other Fundamental Document, or in
any document or instrument executed and delivered or furnished, or to be
executed and delivered or furnished, in connection therewith shall be deemed to
be references to, and shall include, the Company.
(c) All references to the term "Contributor" in the
Contribution Agreement, or in any document or instrument executed and delivered
or furnished, or to be executed and delivered or furnished, in connection
therewith shall be deemed to be references to, and shall include, the Company.
2. Representations and Warranties. The Company hereby
represents and warrants to the Agents, the Issuing Bank, and the Lenders as
follows:
(a) The Company has the requisite [CORPORATE, PARTNERSHIP
OR COMPANY] power and authority to enter into this Assumption Agreement and to
perform its obligations hereunder and under the Credit Agreement and the
Contribution Agreement and the other Fundamental Documents to which it is a
party. The execution, delivery and performance of this Assumption Agreement by
the Company and the performance of its obligations hereunder and under the
Credit Agreement, the Contribution Agreement and the other Fundamental Documents
have been duly authorized by the [BOARD OF DIRECTORS OF THE COMPANY] and no
other [CORPORATE, PARTNERSHIP OR COMPANY] proceedings on the part of the Company
are necessary to authorize the execution, delivery or performance of this
Assumption Agreement, the transactions contemplated hereby or the performance of
its obligations under the Credit Agreement, the Contribution Agreement or any
other Fundamental Document. This Assumption Agreement has been duly executed and
delivered by the Company. This Assumption Agreement, the Credit Agreement, the
Contribution Agreement and the other Fundamental Documents each constitutes a
legal, valid and binding obligation of the Company enforceable against it in
accordance with its respective terms, subject, as to the enforcement of
remedies, to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general principles of equity.
(b) The representations and warranties set forth in Article
3 of the Credit Agreement are true and correct on and as of the date hereof
(except to the extent that such representations and warranties expressly relate
to an earlier date) with the same effect as if made on and as of the date
hereof.
(c) The authorized capitalization of the Company, the
number of shares of its capital stock outstanding on the date hereof, and the
ownership of the outstanding shares of its capital stock is set forth on
Schedule 1 hereto.*/
_________________________
*/ If the Company is a limited partnership, insert the
following paragraph:
"The general partners of the company and the ownership of its
partnership interests are set forth on Schedule 1 hereto";
or if the Company the Company is a limited liability company,
insert the following paragraph:
2
(d) As of the date hereof, the exact legal name of the
Company is ________ and the Company has not done business, is not doing business
and does not intend to do business other than under its full [CORPORATE,
PARTNERSHIP OR COMPANY] name, including, without limitation, under any trade
name or other doing business name and is in good standing in all jurisdictions
where the nature of its properties or business so requires. The Company is a
[CORPORATION, PARTNERSHIP, LIMITED LIABILITY COMPANY, LIMITED LIABILITY
PARTNERSHIP OR OTHER] organized under the laws of __________. The Company's
taxpayer identification number and organizational number, if any, are
___________.
3. Further Assurances. At any time and from time to time,
upon the Administrative Agent's request and at the sole expense of the Company,
the Company will promptly and duly execute and deliver any and all further
instruments and documents and take such further action as the Administrative
Agent reasonably deems necessary to effect the purposes of this Assumption
Agreement.
4. Binding Effect. This Assumption Agreement shall be
binding upon the Company and shall inure to the benefit of the Lenders and their
respective successors and assigns.
5. Conflict. In the event of a conflict between this
Assumption Agreement and the Credit Agreement, the provisions of the Credit
Agreement will govern.
6. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW
YORK.
[SIGNATURE PAGES FOLLOW]
________________________________________________________________________________
"The members of the Company and the ownership of its limited
liability company interests are set forth on Schedule 1 hereto".
3
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered by its duly authorized officer as of
the date first above written.
[NAME OF COMPANY]
By
--------------------------------------------
Name:
Title:
4
SCHEDULE 1
[AUTHORIZED CAPITALIZATION:
NUMBER OF SHARES OF CAPITAL STOCK
OUTSTANDING:
OWNERSHIP OF THE OUTSTANDING
CAPITAL STOCK:]
or
[GENERAL PARTNERS:
OWNERSHIP OF THE
PARTNERSHIP INTERESTS:]
or
[MEMBERS OF THE COMPANY:
OWNERSHIP OF THE
LIMITED LIABILITY COMPANY
INTERESTS:]
SCHEDULE 2
Location of Collateral
----------------------
EXHIBIT D
---------
================================================================================
OPEN-END MORTGAGE, ABSOLUTE ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
from
Gold ▇▇▇▇▇, inc.
a Delaware corporation
to
WACHOVIA BANK, NATIONAL ASSOCIATION, as
Collateral Agent
Premises:
Pine Grove ▇▇▇▇▇▇▇▇ and Knitting
▇▇ ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dated: as of October __, 2002
THIS MORTGAGE SECURES FUTURE ADVANCES UP TO THE MAXIMUM
PRINCIPAL AMOUNT OF $162,286,877.00 PURSUANT TO PENNSYLVANIA ACT ▇▇.
▇▇ ▇▇.▇.▇.▇. ▇▇.▇▇.▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ 126 OF 1990
================================================================================
Record and Return to:
Prepared by: ▇▇▇▇▇▇▇ ▇. ▇▇▇, Esq.
▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
1
THIS OPEN-END MORTGAGE, ABSOLUTE ASSIGNMENT OF RENTS, SECURITY
AGREEMENT AND FIXTURE FILING (the "Mortgage") is made as of October __, 2002, by
and between Gold ▇▇▇▇▇, Inc., a Delaware corporation, having its offices at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (herein, together with
its successors and assigns, the "Mortgagor") and Wachovia Bank, National
Association having its principal offices at ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ (herein, together with its successors and assigns, the "Mortgagee"), as
Collateral Agent for the Administrative Agent, Issuing Bank, Lenders,
Noteholders and A-Advanced Lender (each as hereinafter defined).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Wachovia Bank, National Association, as Administrative Agent
and Collateral Agent for the Lenders and Issuing Bank (in such capacity,
together with its successors and assigns, the "Administrative Agent") has
entered into a certain Credit, Security, Guaranty and Pledge Agreement, dated as
of October __, 2002 (as the same may be amended, modified or otherwise
supplemented from time to time, the "Credit Agreement") with ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Inc. (herein, together with its successors and assigns, the "Borrower"), the
Mortgagor certain of the Borrower's other subsidiaries (herein, together with
their successors and assigns, the "Guarantors"), the issuing bank identified
therein (herein, together with its successors and assigns, the "Issuing Bank")
and the lenders identified therein (herein, together with their successors and
assigns, the "Lenders") pursuant to which the Issuing Bank and the Lenders have
agreed to make loans or otherwise extend credit to the Borrower; and
WHEREAS, the holders of the Notes (as hereinafter defined) (herein,
together with their successors and assigns, the "Noteholders") have entered into
a certain Note Agreement, dated as of September 30, 2002 (as the same may be
amended, modified or otherwise supplemented from time to time, the "Note
Agreement") with the Borrower pursuant to which the Borrower has issued up to
$135,000,000 of its 9.89% Senior Secured Notes (as the same may be amended,
modified, supplemented, increased or replaced from time to time, the "Notes");
and
WHEREAS, A-Advanced Mini-Storage, LLC (herein, together with its
successors and assigns, "A-Advanced") has issued to Wachovia Bank, National
Association, in its individual capacity (herein, together with its successors
and assigns, in such capacity the "A-Advanced Lender") that certain Note dated
October 21, 1998 in the principal amount of $2,300,000 and that certain Note
dated March 9, 2000 in the principal sum of $250,000 (collectively, as each of
the same may be amended, modified, supplemented, increased or replaced from time
to time, the "A-Advanced Notes") and in connection therewith, the Borrower has
delivered that certain Guaranty, dated as of September 30, 2002 in favor of the
A-Advanced Lender (as the same may be amended, modified or otherwise
supplemented from time to time, the "A-Advanced Guaranty") pursuant to which the
Borrower has guaranteed the obligations of A-Advanced to the A-Advanced Lender.
WHEREAS, the Mortgagee has been appointed Collateral Agent by the
Administrative Agent (on behalf of the Issuing Bank and the Lenders), the
Noteholders and the A-Advanced Lender pursuant to that certain Intercreditor and
Collateral Agency Agreement dated as of October ___, 2002 among the Mortgagee,
2
the Administrative Agent, the Noteholders, the Borrower and the A-Advanced
Lender (as the same may be amended, modified or otherwise supplemented from time
to time, the "Intercreditor Agreement"); and
WHEREAS, the Guarantors are parties to (i) the Credit Agreement and
(ii) that certain Guaranty, Security and Pledge Agreement, dated as of September
30, 2002 in favor of the Collateral Agent for the benefit of the Noteholders and
the A-Advanced Lender (as the same may be amended, modified or otherwise
supplemented from time to time, the "Guaranty and Security Agreement") and have
therein guaranteed the respective obligations and indebtedness of the Borrower
to the Issuing Bank, the Lenders, the Noteholders and the A-Advanced Lender
pursuant to the respective terms thereof and other documents delivered in
connection therewith; and
WHEREAS, simultaneously with the execution hereof the Mortgagor, the
Borrower and the other Guarantors are executing and delivering this Mortgage and
other mortgages (in these recitals, the "Other Mortgages") on the real property
assets of the Borrower and such other Guarantors, in favor of the Collateral
Agent for the benefit of the Issuing Bank, the Lenders, the Noteholders and the
A-Advanced Lender and all other holders and obligees of the Secured Indebtedness
(as hereinafter defined) as security for said Secured Indebtedness; and
WHEREAS, in this Mortgage any reference to "Secured Indebtedness"
shall mean the total indebtedness and liabilities to be secured by this Mortgage
consisting of the sum of the following: (i) the aggregate principal amount of
all loans and other advances made and to be made by the Issuing Bank and the
Lenders under the Credit Agreement, the outstanding principal amount of which
shall not exceed Twenty Five Million Dollars ($25,000,000.00) at any time
(whether at maturity, by acceleration or otherwise); plus (ii) interest on the
principal amount of all Loans (as defined in Credit Agreement) made and to be
made by the Issuing Bank and the Lenders under the Credit Agreement; plus (iii)
all other Obligations (as such term is defined in the Credit Agreement); plus
(iv) the principal of and interest on the Notes pursuant to the terms thereof,
and pursuant to the terms of the Note Agreement and the Guaranty and Security
Agreement, whether at maturity, by acceleration, call for redemption or
repurchase, or otherwise; plus (v) the principal of and interest on the
A-Advanced Notes pursuant to the terms thereof, and pursuant to the terms of the
A-Advanced Guaranty and the Guaranty and Security Agreement; plus (vi) all other
amounts due or to become due, and all covenants, obligations and liabilities of
the Mortgagor, the Borrower and the other Guarantors, under or in connection
with the Credit Agreement, the Note Agreement, the Notes, the A-Advanced
Guaranty, the A-Advanced Note, the Intercreditor Agreement, the Guaranty and
Security Agreement, this Mortgage and the Other Mortgages, and the performance
of all other obligations to the Noteholders under the Note Agreement, the Notes,
this Mortgage and the Other Mortgages, according to the terms thereof, in each
case as the same may be amended, modified or supplemented from time to time
(including advances to protect security and the costs of enforcement) or the
maturities thereof may be extended or renewed; and
WHEREAS, the execution and delivery of this Mortgage is required by
the terms of the Credit Agreement, the Note Agreement, the A-Advanced Guaranty
and the Intercreditor Agreement; and
3
WHEREAS, any reference in this Mortgage to the "Loan Documents" shall
mean and refer, individually or collectively as the context requires, to the
Credit Agreement, the Note Agreement, the Notes, the A-Advanced Notes, the
A-Advanced Guaranty, the Guaranty and Security Agreement, the Intercreditor
Agreement, the Other Mortgages and the other agreements, undertakings,
instruments and other documents delivered by and among the Borrower and/or the
Guarantors in connection with or related to the transactions contemplated by the
Loan Documents.
NOW, THEREFORE, in order to secure the payment of the Secured
Indebtedness, the Mortgagor hereby mortgages, warrants, gives, grants, conveys,
releases, assigns, transfers, and sets over unto the Mortgagee, its successors
and assigns forever, with power of sale and right of entry and possession, the
property and rights described in the following granting clauses that Mortgagor
now has or may hereafter acquire in, to, under or derived from:
Those certain lot(s), piece(s) or parcel(s) of land described on
Schedule "A" attached hereto and made a part hereof for all purposes, and all
tenements, hereditaments, servitudes, appurtenances, rights, privileges, and
immunities belonging or appertaining thereto (the foregoing is collectively
referred to as the "Land"); and
TOGETHER WITH, the lease(s), if any, described in Schedule "A" hereto
and the leasehold estate created thereby, as the same may be modified, amended,
renewed or extended, and all rights in and to any deposits of cash, securities
or other property which may be held at any time and from time to time by the
lessor under said lease to secure the performance by Mortgagor of the covenants,
conditions and agreements to be performed by Mortgagor thereunder, and any
option or right of first refusal to purchase the fee simple title to the Land,
or any greater interest therein that Mortgagor now owns (the foregoing is
collectively referred to as the "Lease"); and
TOGETHER WITH, all structures, buildings, facilities and other
improvements thereto or thereon situate heretofore or hereafter erected or
placed on the Land, and all building materials, equipment and fixtures of every
kind and nature now or hereafter located on the Land (the foregoing is
collectively referred to as the "Improvements"); and
TOGETHER WITH, all tenements, hereditaments, rights, rights-of-way,
easements, privileges, liberties, riparian rights and appurtenances thereunto
belonging, or in any wise appertaining to the Real Property (as hereinafter
defined) (including, without limitation, all rights relating to storm and
sanitary sewer, water, gas, electric, railway and telephone services); all
right, if any, title and interest, if any, of the Mortgagor in and to all gas,
oil, minerals, coal and other substances of any kind or character underlying
such Real Property; and all estate, claim, demand, right, title or interest, if
any, of the Mortgagor in and to any street, road, highway, or alley (vacated or
otherwise) adjoining said Real Property or any part thereof (the foregoing is
collectively referred to as the "Appurtenances"); and
TOGETHER WITH, all machinery, equipment, fixtures, fittings, building
or construction materials and other property of every kind whatsoever (and, with
respect to a lease of the any of the foregoing, to the extent of Mortgagor's
4
rights as a lessee thereunder), now or hereafter attached to, or used in
connection with, the Real Property, together with any and all additions thereto,
substitutions therefor, and repairs, replacements, improvements, and
restorations thereof (including, without limitation, all elevators, escalators,
utility installations, plumbing, boilers, heating, lighting, ventilation, air
conditioning, roof tanks, motors, steam piping, sprinkler systems, cleaning
equipment, spare parts of any kind whatsoever, and other installations and
fixtures of every kind whatsoever), and all cash and non-cash proceeds thereof,
all of which shall be deemed to be and remain and form a part of the realty and
are covered by the lien of this Mortgage (the foregoing is collectively referred
to as the "Equipment"); and
TOGETHER WITH, all right, title and interest of the Mortgagor, as
lessor, under all leases, subleases, licenses, occupancy agreements or
concessions whereby any Person has agreed to pay money or any consideration to
the Mortgagor for the use, possession or occupancy of the Real Property or any
part thereof, and all rents, income, profits, benefits, avails, advantages and
claims against guarantors under any thereof (the foregoing is collectively
referred to as the "Space Leases"); and
TOGETHER WITH, all right, title and interest of Mortgagor in and to
all management agreements, contracts, agreements, options, rights of first
refusal or rights of first offer and other agreements, understandings or
arrangements relating to the ownership, construction, maintenance, repair,
operation, occupancy, sale or financing of the Real Property or any part
thereof, and all income, profits, benefits, avails, advantages and claims
against guarantors under any of them (the foregoing is collectively referred to
as the "Contracts"); and
TOGETHER WITH, all right, title and interest of Mortgagor in and to
all licenses, permits, certificates of occupancy and other governmental
approvals relating to construction, completion, occupancy, use or operation of
the Real Property or any part thereof (all of the foregoing is collectively
referred to as the "Permits"); and
TOGETHER WITH, all right, title and interest of Mortgagor in and to
all drawings, plans, specifications and similar or related items relating to the
Real Property (the foregoing is collectively referred to as the "Plans"); and
TOGETHER WITH, all right, title and interest of Mortgagor in and to
any and all awards, damages, payment and other compensation, and any and all
claims therefor and rights thereto, which may result from taking or injury by
virtue of the exercise of the power of eminent domain, or any damage, injury or
destruction in any manner caused to the Real Property, the Improvements or the
Equipment thereon, or any part thereof (the foregoing is collectively referred
to as the "Condemnation Awards"); and
TOGETHER WITH, the fullest extent of Mortgagor's right, title and
interest in and to the insurance policies required to be maintained by the
Mortgagor pursuant to the Credit Agreement or this Mortgage (the foregoing is
collectively referred to as the "Insurance Policies") and any and all proceeds
of insurance policies of every kind whatsoever, including title insurance (and
all unearned premiums thereon), now or hereafter payable by reason of any damage
or destruction to the Real Property, whether payable under the Insurance
Policies or otherwise, and all interest thereon (the foregoing is collectively
referred to as the "Insurance Policies and Proceeds"); and
5
TOGETHER WITH, all right, title and interest of the Mortgagor in and
to all other proceeds of the foregoing, other than any proceeds realized from
the sale or other disposition of the foregoing (the foregoing is collectively
referred to as the "Proceeds").
(In this Mortgage, the Land, the Lease, the Improvements, the
Appurtenances, and the Equipment is collectively referred to as the "Real
Property"; provided, however, that where the context would require reference to
tangible real property, the term "Real Property" shall mean the Land, the
Improvements, the Appurtenances and the Equipment and the other items of
tangible real property which are referred to in the granting clauses hereinabove
set forth. The Real Property and all the other rights, interests, benefits and
property described in the foregoing granting clauses are collectively referred
to as the "Mortgaged Property".)
TO HAVE AND TO HOLD the above granted, conveyed, mortgaged and
warranted Mortgaged Property unto the Mortgagee, its successors, heirs and
assigns, to its and their own proper use, benefit and behoove forever,
PROVIDED THAT this Mortgage shall be discharged at the expense of
Mortgagor upon payment and performance in full of the Secured Indebtedness.
ARTICLE I
MORTGAGOR REPRESENTS, WARRANTS, COVENANTS AND AGREES WITH MORTGAGEE AS FOLLOWS:
Section 1. Definitions. In this Mortgage, all words and terms not
defined herein shall have the respective meanings and be construed herein as
provided in the Credit Agreement, Note Agreement, A-Advanced Guaranty or the
Intercreditor Agreement, respectively. Any reference to a provision of the
Credit Agreement, Note Agreement, A-Advanced Guaranty or the Intercreditor
Agreement shall be deemed to incorporate that provision as a part hereof in the
same manner and with the same effect as if the same were fully set forth herein.
References to this "Mortgage" shall mean this instrument and any and all
renewals, modifications, amendments, supplements, extensions, consolidations,
substitutions, spreaders and replacements of this instrument.
Section 2. Beneficiaries. All covenants, stipulations and agreements
herein contained by and on behalf of the Mortgagor shall be for the sole and
exclusive benefit of the Mortgagee, individually and as Collateral Agent for the
Administrative Agent, the Issuing Bank, the Lenders, the Noteholders and the
A-Advanced Lender. Nothing herein expressed or implied is intended or shall be
construed to confer upon, or to give to, any person other than the Mortgagor and
the Mortgagee any right, remedy or claim under or by reason hereof.
Section 3. No Credit for Taxes Paid. The Mortgagor shall not be
entitled to any credit against payments due hereunder by reason of the payment
of any taxes, assessments, water or sewer rent or other governmental charges
levied against the Mortgaged Property.
Section 4. Representations; Seisin and Warranty. The Mortgagor
represents and warrants that the Mortgagor is the owner of the Real Property
(except for trade fixtures and other improvements owned by tenants under any
Space Leases), free and clear of all liens other than liens which are Permitted
6
Encumbrances; and Mortgagor shall warrant, defend and preserve such title and
the rights granted by this Mortgage with respect thereto against all claims of
all persons and entities. Mortgagor further warrants that it has the absolute
right to grant this Mortgage. This Mortgage constitutes a valid, binding and
enforceable first lien on the Mortgaged Property, subject only to the
encumbrances set forth in Schedule "B" hereto (the "Permitted Encumbrances"),
the terms of the Lease, if any, described on Schedule "A" attached hereto and
such other encumbrances on the Real Property as may be approved by Mortgagee in
writing.
(a) The Mortgagor shall cause the representations and warranties in
this Section 4 to continue to be true in each and every respect.
Section 5. Preservation, Maintenance and Repair. Except as otherwise
expressly provided in the Loan Documents, all buildings, structures and other
improvements which are presently erected and in the future are to be erected
upon the Real Property, shall be kept in good and substantial repair, working
order and condition, and shall not be removed or demolished without the prior
express written consent of the Mortgagee, which consent shall be granted or
withheld in accordance with the applicable provision of the Loan Documents.
Mortgagor may from time to time make such substitutions, additions,
modifications and improvements as may be necessary and as shall not impair the
structural integrity, operating efficiency and economic value of the Mortgaged
Property. All alterations, replacements, renewals or additions made pursuant to
this Section shall automatically become and constitute a part of the Mortgaged
Property and shall be covered by the lien of this Mortgage. The Mortgagor shall
not do, and shall not permit to be done, any act that may in any way materially
impair or weaken the security under this Mortgage.
Section 6. No Additional Liens. The Mortgagor shall not, without the
prior express written consent of the Mortgagee, remove or suffer to be removed
from the Mortgaged Property any fixtures subject to the lien hereof (as the term
"fixtures" is defined by the law in the State in which the Real Property is
located) and including all personal property located on and used in connection
with the Real Property, presently or in the future to be incorporated into,
installed in, annexed or affixed to the Mortgaged Property (unless such fixtures
have been replaced with similar fixtures of equal or greater utility and value);
nor, except as permitted pursuant to the Credit Agreement, the Note Agreement,
the A-Advanced Guaranty, the Guaranty and Security Agreement or the
Intercreditor Agreement will the Mortgagor execute or cause to be executed any
security interest upon any such fixtures, additions to, substitutions or
replacements thereof or upon any fixtures in the future to be installed in,
annexed or affixed to the Mortgaged Property, without the prior express written
consent of the Mortgagee.
Section 7. Performance. Mortgagor will perform and observe all of its
obligations under the Credit Agreement, Note Agreement, A-Advanced Guaranty, the
Intercreditor Agreement and the other Loan Documents to which it is a party. The
Mortgagor shall duly perform and abide by the terms and covenants herein.
Section 8. Waiver. The acceptance by the Mortgagee of any payments
hereunder, after default, or the failure of the Mortgagee, in any one or more
instances to insist upon strict performance by the Mortgagor of any terms and
covenants of this Mortgage or to exercise any option or election herein
7
conferred, shall not be deemed to be a waiver or relinquishment for the future
of any such terms, covenants, elections or options.
Section 9. Mortgage as Security Agreement and Financing Statement.
This Mortgage constitutes a security agreement and a financing statement under
the Uniform Commercial Code of the State in which the Real Property is situated
(the "Code"), and the Mortgagor (debtor under the financing statement) hereby
grants to the Mortgagee (secured party under the financing statement) a security
interest in all goods and inventory and in all machinery, equipment, fixtures,
fittings and building and construction and other property now owned or hereafter
acquired by the Mortgagor, and installed or to be installed in or on the
Mortgaged Property, or used or to be used in the business, management or
operation of the Mortgaged Property, and all substitutions, replacements,
additions and accessions thereto (provided that any such substitutions,
replacements, additions and accessions shall be in compliance with Section 5 of
this Article), together with all cash and non-cash proceeds thereof. The mailing
addresses of Mortgagor (Debtor) and Mortgagee (Secured Party) appear at the
beginning hereof. The organization number for Mortgagor is DE 0270405 and the
tax identification number for Mortgagor is ▇▇-▇▇▇▇▇▇▇. The Mortgagor hereby
irrevocably authorizes Mortgagee at any time and from time to time, to file in
the appropriate office in any Uniform Commercial Code jurisdiction initial
financing statements and amendments thereto that (a) describe the Mortgaged
Property hereby secured; and (b) contain any other information required by
Article 9 of the Uniform Commercial Code. The Mortgagor shall execute, deliver,
file and re-file any financing statements, or continuation statements that the
Mortgagee may require from time to time to confirm the lien of this Mortgage
with respect to such property. Without limiting the foregoing, the Mortgagor
hereby irrevocably appoints the Mortgagee as the attorney-in-fact for the
Mortgagor to execute, deliver and file the initial financing statements and all
other instruments for and on behalf of the Mortgagor. Notwithstanding any
release of any or all of that property included in the Mortgaged Property which
is deemed "real property", and proceedings to foreclose this Mortgage or its
satisfaction of record, the terms hereof shall survive as a security agreement
with respect to the security interest created hereby and referred to above until
the repayment or satisfaction in full of the Secured Indebtedness of the
Borrower and the Mortgagor as are now or hereafter secured hereby. This
instrument shall be deemed a fixture filing under the Uniform Commercial Code of
the State in which the Real Property is situated.
Section 10. No Assignment. This Mortgage shall not be assigned by the
Mortgagor without the prior express written consent of the Mortgagee.
Section 11. Date of Mortgage. The date of this Mortgage shall be for
identification purposes only and shall not be construed to imply that this
Mortgage was executed on any date other than the respective dates of the
acknowledgments of the parties hereto. This Mortgage shall become effective upon
its delivery.
Section 12. Taxes; Recording Taxes and Fees. (a) The Mortgagor shall
promptly pay and discharge or cause to be promptly paid and discharged all
taxes, assessments, municipal or governmental rates, charges, impositions, liens
and water and sewer rents or any part thereof, heretofore or hereafter imposed
upon it or in respect of this Mortgage or any of its property and assets when
8
the same shall become due and payable, as well as all lawful claims which, if
unpaid might become a lien or charge upon such property and assets or any part
thereof (the "Impositions"); provided, however, that any such Impositions need
not be paid if the validity or amount thereof shall currently be contested in
good faith and at Mortgagor's sole expense by appropriate proceedings, but such
right to contest shall not be deemed or construed in any way as relieving,
modifying or extending Mortgagor's covenant to pay such Impositions at the time
and in the manner provided in this Section, unless Mortgagor has given prior
written notice to Mortgagee of Mortgagor's intent so to contest or object and
unless (i) such legal proceedings shall operate conclusively to prevent the sale
or forfeiture of the Mortgaged Property, or any part thereof, to satisfy such
Impositions or the termination or revocation of any required license, prior to
final determination of such proceedings and (ii) if requested in writing by
Mortgagee, the Mortgagor shall furnish a good and sufficient bond from a surety
company reasonably satisfactory to Mortgagee or other security reasonably
satisfactory to Mortgagee in the amount of the Impositions which are being
contested plus any interest and penalty which may be imposed thereon and which
could become a lien against the Mortgaged Property. Within ten (10) days of a
written request by Mortgagee, Mortgagor shall submit to Mortgagee receipted
bills or other evidence showing payment of all real property taxes, mortgage
taxes, assessments, governmental charges or levies and lawful claims before any
penalty accrues thereon. Within ten (10) days of a written request by Mortgagee,
Mortgagor shall submit to Mortgagee an affidavit certifying that all other
taxes, assessments and other governmental charges or levies imposed upon
Mortgagor in respect of the Mortgaged Property for the most recent fiscal year,
and which are currently due and payable, have been paid before accrual of any
penalties thereon.
(b) The Mortgagor shall pay all (i) filing, registration or recording
fees, and all reasonable expenses incident to the execution and acknowledgment
of this Mortgage, any mortgage supplemental hereto, any assignments of rents,
profits and leases, any security instrument with respect to any equipment, and
any instrument of further assurance; and (ii) all federal, state, county and
municipal stamp taxes, mortgage recording taxes, and other taxes, duties,
imposts, assessments and charges arising out of or in connection with the
Secured Indebtedness, and the execution, delivery and recording of this
Mortgage, any mortgage supplemental hereto, any security instrument with respect
to any equipment or any instrument of further assurance.
Section 13. Change in Laws. During the term of this Mortgage, in the
event of the passage of any law or regulation which changes in any way the laws
now in force for the taxation of mortgages, or debts secured thereby, for state
or local purposes, or the manner of the operation of any such taxes, so as to
affect the interest of the Mortgagee or the Lenders, then and in such event, the
Mortgagor shall bear and pay the full amount of such taxes, provided however,
that Mortgagor shall not be responsible for the payment of any income or
franchise taxes of the Mortgagee, the Lenders, the Issuing Bank, the A-Advanced
Lender, or the Noteholders.
Section 14. Insurance. (a) Mortgagor shall maintain or cause to be
maintained on the Mortgaged Property during the life of this Mortgage, insurance
policies in such amounts as Mortgagee shall reasonably require, insuring the
Mortgaged Property against fire, extended coverage and such other insurable
hazards, casualties and contingencies as Mortgagee may reasonably require.
(b) Each insurance policy, to the extent available, shall (i) provide
that it shall not be canceled, non-renewed or materially amended without 30-days
9
prior written notice to Mortgagee, (ii) with respect to all property insurance,
provide for deductibles not to exceed $500,000.00, (iii) contain a "Replacement
Cost Endorsement" without any deduction made for depreciation, and (iv) contain
a "standard" or "New York" beneficiary clause acceptable to Mortgagee. Liability
insurance policies shall name Mortgagee as an additional insured and contain a
waiver of subrogation against Mortgagee; all such policies shall indemnify and
hold Mortgagee harmless from all liability claims occurring on, in or about the
Real Property and the adjoining streets, sidewalks and passageways. The amounts
of each insurance policy (subject to the foregoing limitation) and the form of
each such policy shall at all times be reasonably satisfactory to Mortgagee.
(c) If any required insurance shall expire, be withdrawn, become void
by breach of any condition thereof by Mortgagor or by any lessee of any part of
the Mortgaged Property or become void or unsafe by reason of the failure or
impairment of the capital of any insurer, or if for any other reasonable reason
whatsoever such insurance shall become reasonably unsatisfactory to Mortgagee,
Mortgagor shall promptly obtain new or additional insurance reasonably
satisfactory to Mortgagee. Mortgagor shall not take out any separate or
additional insurance that is contributing in the event of loss unless it is
properly endorsed and otherwise satisfactory to Mortgagee in all respects.
(d) Mortgagor shall deliver to Mortgagee a certificate of such
insurance reasonably acceptable to Mortgagee, together with a copy of the
declaration page (as soon as practicable) for each such policy. Mortgagor shall
(i) pay as they become due all premiums for such insurance, (ii) not later than
10 days prior to the expiration of each policy to be furnished pursuant to the
provisions of this Section, deliver a renewed policy or policies, certificates
thereof, or duplicate original or originals thereof, marked "premium paid," or
accompanied by such other evidence of payment satisfactory to Mortgagee.
(e) If Mortgagor is in default of its obligations to insure or
deliver any such prepaid policy or policies, then Mortgagee, at its option and
with reasonable written notice to Mortgagor, may effect such insurance from year
to year, and pay the premium or premiums therefor, and Mortgagor shall pay to
Mortgagee on demand such premium or premiums so paid by Mortgagee with interest
from the time of payment at the applicable rate of interest under the Credit
Agreement.
(f) Mortgagor shall not use or permit the use of the Mortgaged
Property in any manner which would permit any insurer to cancel any insurance
policy or void coverage required to be maintained by this Mortgage.
(g) Mortgagor may maintain insurance required under this Mortgage by
means of one or more blanket insurance policies maintained by Mortgagor;
provided, however, that (A) any such policy shall specify, or Mortgagor shall
furnish to Mortgagee a written statement from the insurer so specifying, the
maximum amount of the total insurance afforded by such blanket policy that is
allocated to the Real Property and the other Mortgaged Property and any
sub-limits in such blanket policy applicable to the Real Property and the other
Mortgaged Property, (B) each such blanket policy shall include an endorsement
providing that, in the event of a loss resulting from an insured peril,
insurance proceeds shall be allocated to the Mortgaged Property in an amount
equal to the coverages required to be maintained by Mortgagor as provided above
10
and (C) the protection afforded under any such blanket policy shall be no less
than that which would have been afforded under a separate policy or policies
relating only to the Mortgaged Property.
Section 15. Damage and Destruction. (a) If the Mortgaged Property, or
any part thereof, shall be destroyed or damaged by fire or any other casualty,
whether insured or uninsured, or in the event any claim is made against
Mortgagor for any personal injury, bodily injury or property damage incurred on
or about the Real Property, Mortgagor shall give immediate notice thereof to
Mortgagee. Subject to any Loan Documents, the proceeds of insurance policies
coming into the possession of Mortgagee shall not be deemed trust funds and
Mortgagee shall be entitled to dispose of such funds as provided herein.
(b) Subject to the provisions of the Credit Agreement, in the event
of any damage or destruction to the Mortgaged Property by fire or otherwise, and
provided that Mortgagee has received and approved satisfactory evidence of the
following as soon as practicable, but in all events within ninety (90) days
after the occurrence of the casualty:
(i) repairs can be made, within 180 days after the date of the
casualty, under the laws and regulations of the federal, state and local
governmental authorities having jurisdiction thereof;
(ii) there shall exist no Event of Default or condition which
with the passage of time or giving of notice might become an Event of Default;
(iii) Mortgagor has available, from insurance proceeds and/or
Mortgagor's own funds, sufficient funds as are necessary in the reasonable
judgment of Mortgagee to complete the Restoration (as hereinafter defined) and
to meet all obligations of the Mortgage Documents, taking into account the
change in circumstances resulting from the casualty;
(iv) the Restoration can be completed substantially in
accordance with the plans and specifications utilized for the original
construction of the Real Property, (as the same may be modified to bring the
Improvements to compliance with current building and safety codes) or other
plans and specifications as are reasonably acceptable to Mortgagee; and
(v) any and all permits, certificates, authorizations or
approvals required for the Restoration have been or may be properly obtained by
Mortgagor;
then Mortgagor and Mortgagee hereby agree that the insurance loss proceeds may
be applied by Mortgagor in accordance with the provisions hereof to Restoration
(as defined herein). Any such insurance proceeds, less the actual costs, fees
and expenses, if any, incurred by Mortgagor in connection with adjustment of the
loss shall be held in a trust account (the "Restoration Trust Account") by
Mortgagor and shall be applied by Mortgagor to the payment of the cost of any
repairs, replacements, rebuilding or alterations required in connection with the
Mortgaged Property, including the cost of temporary repairs, protection of
property and permanent restoration, repairs, replacements, rebuilding or
alterations (all of which temporary repairs, protection of property and
permanent restoration, repairs, replacements, rebuilding or alterations are
herein collectively referred to as the "Restoration"), and shall be paid out
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from time to time as such Restoration progresses if the work for which payment
is requested has been done in a good workmanlike manner and substantially in
accordance with the plans and specifications therefor. In furtherance of the
foregoing, upon the written request of Mortgagee, Mortgagor shall provide the
following:
(i) A certificate signed by Mortgagor's architect or
general contractor setting forth the following:
A. A brief description of sums due to contractors,
subcontractors, materialmen, engineers, architects or other persons who have
rendered services or furnished materials for the Restoration therein specified
and that the sum then requested does not exceed the value of the services and
materials described in the certificate.
B. That, except for the amount, if any, stated
(pursuant to the foregoing sub-clause (A)), in such certificate to be due for
services or materials, there is no outstanding indebtedness known to the persons
signing such certificate, after due inquiry, which is then due at the date of
such certificate for labor, wages, materials, supplies or services in connection
with such Restoration.
C. That the cost, as estimated by the persons signing
such certificate, of the Restoration required to be done subsequent to the date
of such certificate in order to complete and pay for the same, does not exceed
the insurance money, plus any amount deposited by Mortgagor to defray such cost
and remaining in the hands of Mortgagee after payment of the sum requested in
such certificate, plus interest, if any, reasonably estimated to be earned on
all such sums during the remaining Restoration period.
(ii) Evidence, reasonably satisfactory to Mortgagee, to
the effect that there has not been filed with respect to the
Mortgaged Property or any part thereof any vendor's, mechanic's,
laborer's, materialman's or other lien (other than invalid or
improperly filed liens) which has not been discharged of record,
except such as will be discharged by payment of the amount then
requested, and that upon such payment no such liens may be validly
filed.
Notwithstanding the foregoing, to the extent that the cost of Restoration, as
reasonably estimated by Mortgagee, shall be less than $250,000.00, insurance
proceeds may be payable directly to Mortgagor, in trust, for the sole purpose of
performing the Restoration of the Mortgaged Property.
Section 16. Condemnation/Eminent Domain. Immediately upon obtaining
knowledge of the institution of any proceedings for the condemnation of the
Mortgaged Property, or any portion thereof, Mortgagor will notify Mortgagee of
the pendency of such proceedings. Mortgagor shall, at its expense, diligently
prosecute any such proceeding. All awards and proceeds of condemnation shall be
paid directly to Mortgagor to be applied in the same manner as insurance
proceeds, as provided above (subject to the provisions of any Lease as more
particularly described in the provisions hereof dealing with such insurance
proceeds).
Section 17. Compliance with Laws. The Mortgagor agrees to comply with
all laws, rules, regulations and ordinances made or promulgated by the United
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States, the State, County and/or the City in which the Real Property is located
and/or any other lawful authority which are now or may hereafter be applicable
to the Mortgaged Property (the "Legal Requirements") within such time as may be
required by law, provided, however, that Mortgagor shall have the right to
contest the application or validity of any such Legal Requirements in good faith
at its sole cost and expense by appropriate proceedings but such right shall not
be deemed or construed in any way as relieving, modifying or extending
Mortgagor's covenant to comply therewith as provided in this Section unless
Mortgagor has given prior written notice to Mortgagee of Mortgagor's intent so
to contest and unless (a) the legal proceedings shall operate conclusively to
prevent the sale or forfeiture of the Mortgaged Property, or any part thereof,
for failure to comply with such obligations prior to final determination of such
proceedings, (b) if during such contest a lien or cloud on title shall exist
with respect to any of the Mortgaged Property, Mortgagor shall provide Mortgagee
with a good and sufficient bond from a surety company reasonably satisfactory to
Mortgagee or other security reasonably satisfactory to Mortgagee in an amount
equal to the aforesaid lien or cloud on title or, if the amount thereof is
uncertain, in an amount reasonably satisfactory to Mortgagee, and (c) Mortgagee
shall not be subject either to civil or criminal liability for any failure by
Mortgagor to comply with such obligations during the pendency of such contest.
Section 18. Hazardous Substances and Asbestos. Mortgagor shall comply
with Section 3.20 of the Credit Agreement.
Section 19. Indemnification. If any action or proceeding arising out
of or relating to the Mortgaged Property, this Mortgage or any of the
transactions contemplated herein shall be commenced to which action or
proceeding the holder of this Mortgage is made a party, or in which it becomes
necessary to defend or uphold the lien of this Mortgage, the reasonable expense
of any litigation to prosecute or defend the rights and lien created by this
Mortgage (including reasonable attorneys' fees, charges and disbursements
through all appeals), shall be paid by the Mortgagor, and until so paid, any
such sum and the interest thereon shall be a lien on the Mortgaged Property,
prior to any right, or title to, interest in or claim upon the Mortgaged
Property attaching or accruing subsequent to the lien of this Mortgage, and
shall be deemed to be secured by this Mortgage. In any action or proceeding to
foreclose this Mortgage, or to recover or collect the debt secured hereby, the
provisions of law respecting the recovery of costs, disbursements and allowances
shall prevail unaffected by this covenant.
Section 20. Assignment of Rents. The Mortgagor hereby assigns to the
Mortgagee all present and future leases, rents, issues and profits relating to
or arising out of or from the Mortgaged Property as further security for the
payment of the Secured Indebtedness, and the Mortgagor grants to the Mortgagee
the right to enter upon and to take possession of the Mortgaged Property for the
purpose of collecting the same and to let the Mortgaged Property or any part
thereof, and to apply the rents, issues and profits, after payment of all
necessary charges and expenses, on account of said Secured Indebtedness. This
assignment and grant shall continue in effect until all of the Secured
Indebtedness is paid and performed in full and all the Obligations have been
fully repaid and this Mortgage discharged of record and, to Mortgagor's
knowledge, Mortgagee's right to the leases, rents, issues and profits is not
contingent upon, and may be exercised without possession of the Mortgaged
Property. For so long as no Event of Default exists, the Mortgagee hereby waives
the right to enter upon and to take possession of the Mortgaged Property for the
purpose of collecting said rents, issues and profits, and Mortgagor shall have
13
the right to collect said rents, issues and profits. The Mortgagor shall not,
without the written consent of the Mortgagee, receive or collect rent from any
tenant of the Mortgaged Property or any part thereof for a period of more than
one month in advance, (excluding any security deposits as provided in leases
expressly approved by the Mortgagee) and in the event of any Event of Default
under this Mortgage shall pay such rents, issues and profits to the Mortgagee,
or to any receiver appointed to collect said rents, issues and profits. If
Mortgagor or any other occupant does not surrender possession of the Real
Property hereunder in the event of any such Event of Default, Mortgagor and such
occupant shall pay monthly in advance to Mortgagee, or to any receiver appointed
to receive such rents, issues and profits, the fair and reasonable rental value
for the use and occupation of the Mortgaged Property or of such part thereof as
may be in the possession of the Mortgagor or any other occupant, and upon
default in any such payment Mortgagor and such occupant shall vacate and
surrender the possession of the Mortgaged Property to the Mortgagee or to such
receiver, and upon a default in vacating and surrendering the same may be
evicted by summary or any other available proceedings.
Section 21. Advances. Upon any Event of Default by the Mortgagor, the
Mortgagee may at its option remedy such Event of Default, and all payments made
by the Mortgagee to remedy a default by the Mortgagor (including attorneys'
fees, charges and disbursements through all appeals) and the total of any
payment or payments due from the Mortgagor to the Mortgagee which are in
default, together with interest thereon at the highest rate payable from time to
time under the Credit Agreement, the Note Agreement or the A-Advanced Guaranty,
as applicable, (such interest to be calculated from the date of such advance to
the date of payment thereof by the Mortgagor), shall be added to the debt
secured by this Mortgage until paid, and the Mortgagor covenants to repay the
same to the Mortgagee upon demand. Any such sums and the interest thereon shall
be a lien on the Mortgaged Property prior to any other lien attaching to or
accruing subsequent to the lien of this Mortgage to the fullest extent permitted
by law.
Section 22. No Waiver of Existing or Future Rights. No other security
previously or hereafter granted by Mortgagor to Mortgagee to secure payment of
the amount secured by this Mortgage shall be impaired or affected by this
Mortgage; and no security subsequently taken by Mortgagee to secure payment of
the amount secured by this Mortgage shall affect or impair the lien of this
Mortgage, but all such additional security shall be deemed cumulative. Mortgagee
may resort for payment of the amount secured by this Mortgage to any security
held by Mortgagee, in such order and manner as Mortgagee, in its sole
discretion, may elect.
Section 23. Permitted Encumbrances. Except as permitted pursuant to
the Credit Agreement, the Note Agreement, the Guaranty and Security Agreement or
the A-Advanced Guaranty, as applicable, at no time throughout the term of this
Mortgage shall the Mortgagor create, incur, assume or suffer to exist any
mortgage, deed of trust, pledge, lien, security interest, encumbrance,
attachment, levy, distraint or other judicial process and burdens of any kind or
nature on or with respect to any of the Mortgaged Property.
Section 24. Leasehold Mortgage Provisions. (a) Mortgagor covenants
and agrees specifically with respect to any Lease described in Schedule "A" (if
any) and the leasehold estate created thereunder that: the Mortgagor shall
maintain the Lease in full force and effect and not take or allow to be taken
any action that would terminate or cancel, or permit the termination or
cancellation of, the Lease without the prior written consent of the Mortgagee,
and that:
14
(b) The Mortgagor will pay on or before the due dates thereof all
rents and other amounts payable under the provisions of the Lease and will
timely and fully observe and perform all of the terms, covenants, agreements and
conditions of the Lease required therein to be observed and performed by the
Mortgagor as lessee, and will upon written request furnish to the Mortgagee
rental receipts from the lessor under the Lease and other satisfactory evidence
of payment evidencing the timely payment of all rents due thereunder, which
receipts shall be furnished to the Mortgagee in accordance with the applicable
requirements of the Credit Agreement, the Note Agreement, the Guaranty and
Security Agreement and the A-Advanced Guaranty (as applicable). Mortgagor
covenants and agrees to deliver to the Mortgagee a copy of any notice of default
under the Lease received by Mortgagor immediately after such receipt
(c) At Mortgagee's election, Mortgagee may make any payments or do
any act or thing required to be paid or done by the Mortgagor as lessee under
the Lease. Thereupon, Mortgagee shall in addition to all other remedies of
Mortgagee available herein, be fully subrogated to any and all rights of lessor,
under the terms and provisions of the Lease arising from or relating to such
payment or performance.
(d) Mortgagor will not surrender the easements or leasehold estate
created by the Lease, nor voluntarily terminate or cancel the easements or
Lease, and Mortgagor will not without the express written consent of the
Mortgagee modify, change, supplement, alter, or amend the Lease either orally or
in writing, and as further security for the repayment of the Secured
Indebtedness, the Mortgagor hereby assigns to the Mortgagee for the ratable
benefit of the Mortgagee all of its rights, privileges and prerogatives as
lessee under the Lease to terminate, cancel, modify, change, supplement, alter
or amend the Lease (which rights, privileges and prerogatives will not be
unilaterally exercised by Mortgagee until the occurrence of an Event of Default,
and any such termination, cancellation, modification, change, supplement,
alteration or amendment of the Lease without the prior written consent thereto
by the Mortgagee shall be void and of no force and effect. Notwithstanding the
foregoing, and provided Mortgagor shall have provided prior notice thereof to
Mortgagee, Mortgagor may make nonmaterial modifications of the Lease with the
consent of Mortgagee (which consent shall not be unreasonably withheld or
delayed).
(e) No release or forbearance of any obligations under the Lease,
pursuant to the Lease or otherwise, shall release Mortgagor from any of its
obligations under this Mortgage, including Mortgagor's obligations with respect
to payment of rents as provided for in the Lease and the performance of all of
the terms, provisions, covenants, conditions, and agreements contained in the
Lease, to be kept, performed and complied with by the lessee therein (except for
those terms, provisions, covenants, conditions, and agreements which are
specifically waived or released by the lessor under the Lease in writing and
approved by the Mortgagee).
(f) Mortgagor will promptly notify the Mortgagee in writing of the
commencement of a proceeding under the federal bankruptcy laws by or against
Mortgagor or the lessor under the Lease.
(g) If any of the Secured Indebtedness secured hereby remains unpaid
or unperformed at the time when notice may be given by the lessee under the
Lease of the exercise of any right to renew or extend the term of the Lease,
15
Mortgagor will properly and timely exercise such right of extension or renewal
and promptly give notice to the lessor of the exercise of such right of
extension or renewal.
(h) In case any proceeds of insurance upon the Land, the Mortgaged
Property or any part thereof are deposited with any person other than the
Mortgagee pursuant to the requirements of the Lease, Mortgagor will promptly
notify the Mortgagee in writing of the name and address of the person with whom
such proceeds have been deposited and the amount so deposited.
(i) Mortgagor will promptly notify the Mortgagee in writing of any
request made by either party to the Lease to the other party thereto for
arbitration or appraisal proceedings pursuant to the Lease, and of the
institution of any arbitration or appraisal proceedings and promptly deliver to
the Mortgagee a copy of the determination of the arbitrators or appraisers in
each such proceeding.
(j) Mortgagor will not reject the Lease pursuant to 11 U.S.C. Section
365(a) or any successor law, or allow the Lease to be deemed rejected by
inaction and lapse of time, and will not elect to treat the Lease as terminated
by the lessor's rejection of the Lease pursuant to 11 U.S.C. Section 365(h)(1)
or any successor law. As further security for the repayment of the Secured
Indebtedness secured hereby and for the performance of the covenants,
agreements, obligations and conditions herein and in the Lease contained,
Mortgagor hereby assigns to the Mortgagee for the ratable benefit of the
Mortgagee all of the rights, privileges and prerogatives of Mortgagor and the
Mortgagor's bankruptcy trustee to deal with the Lease, which right may arise as
a result of the commencement of a proceeding under the federal bankruptcy laws
by or against Mortgagor or the lessor under the Lease, including, without
limitation, the right to assume or reject or to compel the assumption or
rejection of the Lease pursuant to 11 U.S.C. Section 365(1) or any successor
law, the right to reject the Lease, or the right to elect whether to treat the
Lease as terminated by the lessor's rejection of the Lease or to remain in
possession of the premises demised under the Lease and offset damages pursuant
to 11 U.S.C. Section 365(h)(1) and the rights of Mortgagor to designate the
assignees of the Lease.
(k) As further security for the Secured Indebtedness, Mortgagor
hereby agrees to deposit with the Mortgagee a fully executed counterpart of the
Lease and all supplements thereto and amendments thereof, to be retained by the
Mortgagee until the Secured Indebtedness is fully paid and performed.
(l) Mortgagor hereby represents and warrants that except as
specifically disclosed in a letter from Mortgagor to Mortgagee dated of even
date herewith (a) the Lease is currently in full force and effect and
unmodified, (b) Mortgagor has a valid and subsisting leasehold estate in and the
right to quiet enjoyment to the Real Property demised by the Lease for the full
term of the Lease, (c) there is no existing default under the Lease by reason of
an act or omission of the lessor or Mortgagor and to the best of Mortgagor's
knowledge, no event has occurred which with the lapse of time will authorize the
lessor or Mortgagor to terminate the Lease, (d) Mortgagor has not assigned,
pledged, mortgaged, hypothecated or otherwise transferred the Lease, (e) Neither
lessor or Mortgagor has exercised any option or right to (1) cancel or terminate
the Lease or shorten the term thereof, (2) lease additional premises, (3) reduce
or relocate the premises demised by the Lease or (4) purchase any property, and
16
(f) all rentals, if any, accrued to date have been paid and neither
the lessor nor Mortgagor claims any present charge, lien or claim of offset
against any sum due under the terms of the Lease.
(m) The Mortgagor shall not abandon any or all of the Mortgaged
Property, without the prior written consent of the Mortgagee.
(n) For purposes of Section 4(b) of Article 1, the term "ownership
interest in the Real Property" shall mean "leasehold estate in the Real
Property".
Section 25. Transfer of Mortgaged Property; Space Leases. (a) Except
as permitted pursuant to the Credit Agreement, the Note Agreement, the Guaranty
and Security Agreement and the A-Advanced Guaranty or an express provision of
this Mortgage, Mortgagor shall not sell, transfer, convey or assign all or any
portion of, or any interest in, the Mortgaged Property, whether legal or
equitable, by outright sale, deed, installment sale contract, land contract,
contract for deed, leasehold interest, lease option, contract or any other
method or conveyance of real property interests. Further, without the prior
written consent of Mortgagee in its sole discretion, there shall be no sale,
assignment, transfer, encumbrance, hypothecation or grant a security interest in
the stock, partnership interests, membership interests or other beneficial
ownership interests of Mortgagor and/or the partners of Mortgagor (in the case
of a partnership) except as permitted by the terms of the Credit Agreement, the
Note Agreement, the Guaranty and Security Agreement and the A-Advanced Guaranty
or the other Loan Documents.
(b) As to any Space Lease relating to all or any portion of the
Mortgaged Property, Mortgagor shall (i) promptly perform all of the provisions
of the Space Lease on the part of the lessor thereunder to be performed; (ii)
appear in and defend any action or proceeding arising under or in any manner
connected with the Space Lease or the obligations of Mortgagor as lessor or of
the lessee thereunder; (iii) exercise, within ten (10) days after a request by
Mortgagee, any right to request from the lessee a certificate with respect to
the status thereof; and (iv) simultaneously deliver to Mortgagee copies of any
notices of default which Mortgagor may at any time forward to or receive from
the lessee.
(c) All Space Leases entered into by Mortgagor after the date hereof,
if any, and all rights of any lessees thereunder shall be subject and
subordinate in all respects to the lien and provisions of this Mortgage unless
Mortgagee shall otherwise elect in writing.
(d) If any act or omission of Mortgagor would give any lessee under
any Space Lease the right, immediately or after lapse of a period of time, to
cancel or terminate such Space Lease, or to ▇▇▇▇▇ or offset against the payment
of rent or to claim a partial or total eviction, such lessee shall not exercise
such right until it has given written notice of such act or omission to
Mortgagee and until a reasonable period for remedying such act or omission shall
have elapsed following the giving of such notice without a remedy being
effected.
(e) If, in the event of the enforcement by Mortgagee of any remedy
under this Mortgage, the lessee under each Space Lease shall attorn to Mortgagee
(or to any other Person succeeding to the interest of Mortgagee as a result of
such enforcement) and recognize Mortgagee or such successor in interest as
lessor under the Space Lease without change in the provisions thereof, Mortgagee
or such successor in interest shall not be: (i) bound by any payment of an
17
installment of rent or additional rent which may have been made more than thirty
(30) days before the due date of such installment; (ii) bound by any amendment
or modification to the Space Lease made without the consent of Mortgagee or such
successor in interest; (iii) liable for any previous act or omission of
Mortgagor (or its predecessors in interest); (iv) responsible for any monies
owing by Mortgagor to the credit of such lessee or subject to any credits,
offsets, claims, counterclaims, demands or defenses which the lessee may have
against Mortgagor (or its predecessors in interest); (v) bound by any covenant
to undertake or complete any construction of the premises demised under any
Space Lease or any portion thereof; or (vi) obligated to make any payment to
such lessee other than any security deposit actually delivered to Mortgagee or
such successor in interest. Each lessee or other occupant, upon request by
Mortgagee or such successor in interest, shall execute and deliver an instrument
or instruments confirming such attornment.
Section 26. Future Advances. This Mortgage shall secure the payment
of all loans, monies, credit and other Secured Indebtedness, whether the entire
amount shall have been advanced at the date hereof or at a later date, or having
been advanced, shall have been repaid in part and further advances made at a
later date, and whether or not related to the original advances, together with
the specified interest thereon all in accordance with the terms of the Credit
Agreement, the Note Agreement, the Guaranty and Security Agreement, the
A-Advanced Guaranty or any of the other Loan Documents. It is understood that at
any time before the cancellation and release of this Mortgage, the terms of the
Credit Agreement, the Note Agreement, the Guaranty and Security Agreement, the
A-Advanced Guaranty, the Intercreditor Agreement or any of the other Loan
Documents, including the terms of repayment, may from time to time be modified
or amended in writing by the parties thereto to include or provide for
additional or future advances and this Mortgage shall secure all such additional
or future advances.
Without limiting the foregoing, this Mortgage secures all advances
made by Mortgagee of any kind or nature described in 42 Pa.C.S.A. ss.8144. If
Mortgagor sends a written notice to Mortgagee which purports to limit the
indebtedness secured by this Mortgage and to release the obligation of Mortgagee
to make any additional advances to or for the benefit of Mortgagor, such a
notice shall be ineffective as to any future advances made: (i) to pay taxes,
assessments, maintenance charges and insurance premiums, (ii) for costs incurred
for the protection of the Mortgaged Property or the lien of the Mortgage, (iii)
on account of expenses incurred by Mortgagee by reason of a default of Mortgagor
under the Loan Documents, and (iv) on account of any other costs incurred by
Mortgagee to protect and preserve the Mortgaged Property or the lien of this
Mortgage. It is the intention of the parties hereto that any such advance made
by Mortgagee after any such notice by Mortgagor shall be secured by the lien of
this Mortgage on the Mortgaged Property.
Section 27. Application of Payments and Repayments. So long as the
balance of the Obligations under the Credit Agreement, and the indebtedness
evidenced by the Notes and the A-Advanced Notes, exceeds the portion of the
Secured Indebtedness secured by this Mortgage, any payments and repayments of
the Loans or the payment of principal and interest on said Notes or A-Advanced
Notes shall not be deemed to be applied against, or to reduce, the portion of
the Secured Indebtedness secured by this Mortgage. Such payments shall instead
be deemed to reduce only such portions of the Secured Indebtedness as are
18
secured by mortgages and deeds of trust encumbering real property located
outside the State in which the Real Property is located, which mortgages and
deeds of trust also secure in part the Secured Indebtedness (except to the
extent, if any, that specific mortgages and deeds of trust in such states
contain specific limitations on the amount secured).
Section 28. Other Security. Mortgagee may resort to any other
security held by Mortgagee for the payment of the Secured Indebtedness or the
performance of the Obligations in such order and manner as Mortgagee may elect;
provided, however, that Mortgagee may resort to the sale of any other security
held by Mortgagee for the payment of the Secured Indebtedness or the performance
of the Obligations to the extent that the sale of any such other security is, in
the reasonable judgment of Mortgagee, necessary for the payment of the Secured
Indebtedness or the performance of the Obligations and no such action by
Mortgagee shall operate to modify or terminate any of the rights, powers or
remedies contained in the Loan Documents.
Section 29. No Exhaustion of Remedies Required. Notwithstanding
anything contained herein to the contrary, Mortgagee shall be under no duty to
Mortgagor, any Subsidiary, or others, including, without limitation, the holder
of any junior, senior or subordinate mortgage on the Mortgaged Property or any
part thereof or on any other security held by Mortgagee, to exercise or exhaust
all or any of the rights, powers and remedies available to Mortgagee, whether
under this Mortgage or any other document evidencing or securing the payment of
the Secured Indebtedness or the performance of the Obligations prior to the sale
of the Mortgaged Property.
Section 30. No Merger of Estates. If the Real Property consists of a
leasehold estate, then so long as the Secured Indebtedness shall remain unpaid,
unless Mortgagee shall otherwise consent, the fee title to any leasehold estate
in the Real Property created by the Lease shall not merge but shall always be
kept separate and distinct, notwithstanding the union of such estates either in
the lessor or in the lessee under the Lease or in a third party, by purchase or
otherwise. Mortgagor further covenants and agrees that, in case it shall acquire
the fee title, or any other estate, title or interest in the Real Property, or
any part thereof, covered by the Lease or this Mortgage, this Mortgage shall
attach to and cover and be a lien upon such other estate so acquired, and such
other estate so acquired by Mortgagor shall be mortgaged to Mortgagee and the
lien hereof spread to cover such estate with the same force and effect as though
specifically herein mortgaged. Mortgagor shall, upon demand, execute such
further instruments to facilitate the intent of this Section, as Mortgagee shall
reasonably request.
ARTICLE II
----------
THE OCCURRENCE OF ANY OF THE FOLLOWING EVENTS SHALL BE
AN EVENT OF DEFAULT UNDER THIS MORTGAGE:
Section 1. Event of Default Under the Loan Documents. The occurrence
of any Event of Default under the Intercreditor Agreement, the Credit Agreement,
the Note Agreement, the A-Advanced Guaranty (solely with respect to the
Borrower) and/or this Mortgage, or any of the other Loan Documents.
19
Section 2. Subsidiary Cross-Default. The occurrence of any Event of
Default under any of the agreements, mortgages or other instruments evidencing,
securing or relating to any Secured Indebtedness or other sums owed by any
Guarantor to the Issuing Bank, the Lenders, the Noteholders or the A-Advanced
Lender which is not cured after the expiration of applicable grace periods, if
any, including without limitation, the mortgages and deeds of trust given
contemporaneously herewith by the Guarantors.
Section 3. Transfers. If the Real Property or any interest therein
shall be transferred except as permitted in Section 25 (a) of Article I hereof.
Section 4. Breach of Covenants. The Mortgagor shall have failed to
perform any of the terms, covenants, conditions or undertakings contained in
this Mortgage and such failure shall continue un-remedied for thirty (30) days
after Mortgagor receives written notice from Mortgagee of said failure.
Section 5. Other Foreclosures. In the event that proceedings shall
have been instituted for foreclosure or collection of any mortgage, judgment, or
lien prior, equal to or subordinate to the lien of this Mortgage affecting the
Mortgaged Property or any part thereof.
Section 6. Default under Lease. The occurrence of a default under the
Lease that is not cured within the applicable grace periods set forth in the
Lease, shall be a default under this Mortgage.
ARTICLE III
-----------
IN THE EVENT THERE SHALL OCCUR AN EVENT OF DEFAULT, THE MORTGAGEE
MAY TAKE ANY OR ALL OF THE FOLLOWING ACTIONS, AT THE SAME OR AT
DIFFERENT TIMES:
Section 1. Acceleration. Declare the entire Secured Indebtedness to
be due and payable immediately, and upon any such declaration, the entire unpaid
balance of the Secured Indebtedness shall be immediately due and payable without
presentment, demand, protest or further notice of any kind, all of which are
expressly waived by Mortgagor, anything herein or in any other Loan Documents
notwithstanding.
Section 2. Possession. Upon the occurrence of an Event of Default the
holder of this Mortgage shall have the right forthwith after any such Event of
Default to enter upon, and take possession of the Mortgaged Property, and to
lease and let the said Mortgaged Property, and to receive all the rents, issues
and profits thereof which are overdue, due or to become due, and to apply the
same, after payment of all necessary charges and expenses, on account of the
amounts hereby secured; and the holder of this Mortgage is given and granted
full power and authority to do any act or thing which the Mortgagor or the
successors or assigns of the Mortgagor who may then own the Mortgaged Property
might or could do in connection with the management and operation of the
Mortgaged Property (including, without limitation, complete the construction of
any Improvements and, in the course of such completion, make such changes to the
Mortgaged Property as Mortgagee deems advisable). This remedy shall be effective
either with or without any action brought to foreclose this Mortgage and without
20
applying at any time for a receiver of such rents. Should said rents or any part
thereof be assigned without the consent of the holder of this Mortgage, then the
Secured Indebtedness shall at the option of the holder hereof become due and
payable immediately, anything herein contained to the contrary notwithstanding.
Costs and expenses incurred by the Mortgagee under this Section shall become
part of the Secured Indebtedness secured hereunder.
Section 3. Foreclosure. The Mortgagee may institute an action of
mortgage foreclosure, or take other action as the law may allow, at law or in
equity, for the enforcement of this Mortgage, and proceed thereon to final
judgment and execution of the entire amount secured hereby including costs of
suit, interest and reasonable attorneys' fees. In case of any sale of the
Mortgaged Property by virtue of judicial proceedings, the Mortgaged Property may
be sold in one parcel and as an entirety or in such parcels, manner or order as
the Mortgagee in its sole discretion may elect. The failure to make any tenant a
party defendant to a foreclosure proceeding and to foreclose its rights will not
be asserted by the Mortgagor as a defense in any proceeding instituted by the
Mortgagee to collect the obligations secured hereby or any deficiency remaining
unpaid after the foreclosure sale of the Mortgaged Property. Costs and expenses
incurred by the Mortgage under this Section shall become part of the Secured
Indebtedness secured hereby. Proceeds realized from a foreclosure of this
Mortgage shall be applied in accord with the provisions of the Intercreditor
Agreement and Section 5 of this Article 3 and, in any event, in accord with the
provisions of applicable law.
Section 4. Sale. The Mortgagee may, either with or without entry or
taking possession of the Mortgaged Property as provided in this Mortgage or
otherwise, personally or by its agents, and without prejudice to the right to
bring an action for foreclosure of this Mortgage, sell the Mortgaged Property or
any part thereof pursuant to any procedures provided by applicable Laws and all
estate, right, title, interest, claim and demand therein, and right of
redemption thereof, at one or more sales as an entirety or in parcels, and at
such time and place, and upon such terms and after such notice as may be
required or permitted by applicable Laws.
Section 5. Application of Proceeds; Excess Monies. The proceeds of
any sale made under or by virtue of this Article, whether made under the power
of sale herein granted or under or by virtue of judicial proceedings or of a
judgment or decree of foreclosure and sale, together with any other sums which
may then be held by Mortgagee pursuant to this Mortgage, whether under the
provisions of this Article or otherwise, shall be applied as follows:
(a) first, to Mortgagee for payment of the costs and expenses of such
sale and of all expenses, liabilities and advances made or incurred by Mortgagee
under this Mortgage, and all taxes and assessments due upon the Mortgaged
Property at the time of such sale and to discharge any lien or other encumbrance
prior to this Mortgage, except any taxes, assessments, liens or other
encumbrances subject to which the Mortgaged Property shall have been sold,
(b) second, to the payment of whatever sums may then remain unpaid on
account of the Secured Indebtedness with interest thereon on the date of payment
in accordance with any order of priorities specified in the Intercreditor
Agreement,
(c) third, to the payment of any other sums required to be paid by
Mortgagor pursuant to any provisions of the Intercreditor Agreement or any of
21
the other Loan Documents, including, without limitation, to the payment of all
expenses, liabilities and advances made or incurred by Mortgagee under this
Mortgage or in connection with the enforcement thereof, together with interest
on all such advances,
Section 6. Deficiency Decree. If at any foreclosure proceeding the
Mortgaged Property shall be sold for a sum less than the total amount of
indebtedness for which judgment is therein given, the judgment creditor shall be
entitled to the entry of a deficiency decree against Mortgagor and against the
property of Mortgagor for the amount of such deficiency, subject to applicable
laws; and Mortgagor does hereby irrevocably consent to the appointment of a
receiver for the Mortgaged Property and the property of Mortgagor and of the
rents, issues and profits thereof after such sale and until such deficiency
decree is satisfied in full.
Section 7. Appointment of Receiver. The Mortgagee may have a receiver
of the rents, issues and profits of the Mortgaged Property appointed without the
necessity of proving either the depreciation or the inadequacy of the value of
the security or the insolvency of the Mortgagor or any person who may be legally
or equitably liable to pay moneys secured hereby, and the Mortgagor and each
such person waive such proof and consent to the appointment of a receiver.
Section 8. Confession of Judgment. FOR THE PURPOSE OF OBTAINING
POSSESSION OF THE MORTGAGED PROPERTY IN THE EVENT OF ANY DEFAULT HEREUNDER OR
UNDER THE NOTE, MORTGAGOR HEREBY AUTHORIZES AND EMPOWERS ANY ATTORNEY OF ANY
COURT OF RECORD IN THE COMMONWEALTH OF PENNSYLVANIA OR ELSEWHERE, AS ATTORNEY
FOR MORTGAGOR AND ALL PERSONS CLAIMING UNDER OR THROUGH MORTGAGOR, TO APPEAR FOR
AND CONFESS JUDGMENT AGAINST MORTGAGOR, AND AGAINST ALL PERSONS CLAIMING UNDER
OR THROUGH MORTGAGOR, IN AN ACTION IN EJECTMENT FOR POSSESSION OF THE MORTGAGED
PROPERTY, IN FAVOR OF MORTGAGEE, FOR WHICH THIS MORTGAGE, OR A COPY THEREOF
VERIFIED BY AFFIDAVIT, SHALL BE A SUFFICIENT WARRANT; AND THEREUPON A WRIT OF
POSSESSION MAY IMMEDIATELY ISSUE FOR POSSESSION OF THE MORTGAGED PROPERTY,
WITHOUT ANY PRIOR WRIT OR PROCEEDING WHATSOEVER AND WITHOUT ANY STAY OF
EXECUTION. IF FOR ANY REASON AFTER SUCH ACTION HAS BEEN COMMENCED IT SHALL BE
DISCONTINUED, OR POSSESSION OF THE MORTGAGED PROPERTY SHALL REMAIN IN OR BE
RESTORED TO MORTGAGOR, MORTGAGEE SHALL HAVE THE RIGHT FOR THE SAME DEFAULT OR
ANY SUBSEQUENT DEFAULT TO BRING ONE OR MORE FURTHER ACTIONS AS ABOVE PROVIDED TO
RECOVER POSSESSION OF THE MORTGAGED PROPERTY, MORTGAGEE MAY CONFESS JUDGMENT IN
AN ACTION IN EJECTMENT BEFORE OR AFTER THE INSTITUTION OF PROCEEDINGS TO
FORECLOSE THIS MORTGAGE OR TO ENFORCE THE NOTE, OR AFTER ENTRY OF JUDGMENT
THEREIN OR ON THE NOTE, OR AFTER A SHERIFF'S SALE OR JUDICIAL SALE OR OTHER
FORECLOSURE SALE OF THE MORTGAGED PROPERTY IN WHICH MORTGAGEE IS THE SUCCESSFUL
BIDDER, IT BEING THE UNDERSTANDING OF THE PARTIES THAT THE AUTHORIZATION TO
PURSUE SUCH PROCEEDINGS FOR CONFESSION OF JUDGMENT THEREIN IS AN ESSENTIAL PART
OF THE REMEDIES FOR ENFORCEMENT OF THE MORTGAGE AND THE NOTE, AND SHALL SURVIVE
ANY EXECUTION SALE TO MORTGAGEE;
22
Mortgagor's Initials_________________
Section 9. Waivers of Right. Along with any and all agreements,
waivers and relinquishments made by Mortgagor under this Mortgage and the other
Loan Documents, Mortgagor waives (i) the benefit of all Laws now existing or
that hereafter may be enacted providing for any appraisement before sale of any
portion of the Mortgaged Property; and (ii) the benefit of all Laws that may be
hereafter enacted in any way extending the time for enforcing collection of the
Secured Indebtedness, or creating or extending a period of redemption from any
sale made in collecting the Secured Indebtedness. Mortgagor acknowledges and
agrees that the Mortgaged Property may be located in one or more States and
therefor Mortgagor waives and relinquishes any and all rights it may have,
whether at law or equity, to require Mortgagee to proceed to enforce or exercise
any rights, powers and remedies they may have under the Credit Agreement, the
Note Agreement, the A-Advanced Guaranty and the other Loan Documents in any
particular manner, in any particular order, or in any particular State or other
jurisdiction. Mortgagor further agrees that any particular proceeding, including
without limitation foreclosure through court action (in a state or federal
court) or power of sale, may be brought and prosecuted in the local or federal
courts of any one or more States as to all or any part of the Real Property,
wherever located, without regard to the fact that any one or more prior or
contemporaneous proceedings have been situated elsewhere with respect to the
same or any other part of the Real Property. To the fullest extent that
Mortgagor may do so, Mortgagor agrees that Mortgagor will not at any time insist
upon, plead, claim or take the benefit or advantage of any law now or hereafter
in force providing for any redemption, valuation, appraisement, stay of
execution or extension; and Mortgagor, for itself and on behalf of Mortgagors'
heirs, devisees, representatives, successors and assigns, and on behalf of all
other persons now or hereafter claiming any interest in the Mortgaged Property,
to the extent permitted by law, hereby waives and releases all rights of
redemption, valuation, appraisement, marshalling, stay of execution, extension,
and notice of election to mature or declare due the whole of the Secured
Indebtedness in the event of the foreclosure of the lien hereby created.
Mortgagor further agrees that if any law referred to in this Section and now in
force, of which Mortgagor, Mortgagor's heirs, devisees, representatives,
successors and assigns or other person might take advantage despite this
Section, shall hereafter be repealed or cease to be in force, such law shall not
thereafter be deemed to preclude the application of this Section. Mortgagor
expressly waives and relinquishes any and all rights and remedies that Mortgagor
may have or be able to assert by reason of the Laws of the State of jurisdiction
pertaining to the rights and remedies of sureties. Mortgagor makes these
agreements, waivers and relinquishments knowingly after consulting with and
considering the advice of independent legal counsel selected by Mortgagor.
Section 10. Other Remedies. During the occurrence of an Event of
Default, the Mortgagee may also exercise any and all remedies available to it in
law or in equity or under the Credit Agreement, the Note Agreement, the Guaranty
and Security Agreement, the A-Advanced Guaranty or the other Loan Documents
(subject to the terms of the Intercreditor Agreement) without regard as any
particular order of remedy exercised. Without limiting the foregoing, Mortgagee
shall be entitled to enforce payment and performance of the Secured Indebtedness
or the Obligations and to exercise all rights and powers under this Mortgage or
under any Loan Document or other agreement or any laws now or hereafter in
force, notwithstanding that some or all of the Secured Indebtedness and the
Obligations may now or hereafter be otherwise secured, whether by mortgage, deed
of trust, pledge, lien, assignment or otherwise. Neither the acceptance of this
23
Mortgage nor its enforcement, whether by court action or pursuant to the power
of sale or other powers herein contained, shall prejudice or in any manner
affect Mortgagee's right to realize upon or enforce any other security now or
hereafter held by Mortgagor or Mortgagee, it being agreed that Mortgagor and
Mortgagee, and each of them, shall be entitled to enforce this Mortgage and any
other security now or hereafter held by Mortgagee in such order and manner as
they or either of them may in their absolute discretion determine. No right or
remedy herein conferred upon or reserved to Mortgagee is intended to be
exclusive of any other remedy herein or by law provided or permitted, but each
shall be cumulative and shall be in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or by statute.
Every power or remedy given by any of the Loan Documents to Mortgagee, or to
which Mortgagee may be otherwise entitled, may be exercised concurrently or
independently, from time to time and as often as may be deemed expedient by
Mortgagee and either of them may pursue inconsistent remedies.
Section 11. Multi-site Collateral. If (a) the Real Property shall
consist of one or more parcels, whether or not contiguous and whether or not
located in the same county or city, or (b) in addition to this Mortgage,
Mortgagee shall now or hereafter hold or be the mortgagee or beneficiary of one
or more additional mortgages, liens, deeds of trust or other security (directly
or indirectly) securing the Secured Indebtedness upon other property in the
State in which the Real Property is located (whether or not such property is
owned by Mortgagor or by others) or (c) both the circumstances described in
clauses (a) and (b) shall be true, then to the fullest extent permitted by law,
Mortgagee may, at its election, commence or consolidate in a single trustee's
sale or foreclosure action all trustee's sale or foreclosure proceedings against
all such collateral securing the Secured Indebtedness (including the Mortgaged
Property), which action may be brought or consolidated in the courts of, or sale
conducted in, any county or city in which any of such collateral is located.
Mortgagor acknowledges that the right to maintain a consolidated trustee's sale
or foreclosure action is a specific inducement to Mortgagee to extend the
Secured Indebtedness, and Mortgagor expressly and irrevocably waives any
objections to the commencement or consolidation of the foreclosure proceedings
in a single action and any objections to the laying of venue or based on the
grounds of forum non conveniens which it may now or hereafter have. Mortgagor
further agrees that if Mortgagee shall be prosecuting one more foreclosure or
other proceedings against a portion of the Mortgaged Property or against any
collateral other than the Mortgaged Property, which collateral directly or
indirectly secures the Secured Indebtedness, or if Mortgagee shall have obtained
a judgment of foreclosure and sale or similar judgment against such collateral
(or, in the case of a trustee's sale, shall have met the statutory requirements
therefor with respect to such collateral), then, whether or not such proceedings
are being maintained or judgments were obtained in or outside the State in which
the Real Property are located, Mortgagee may commence or continue any trustee's
sale or foreclosure proceedings and exercise its other remedies granted in this
Mortgage against all or any part of the Mortgaged Property and Mortgagor waives
any objections to the commencement or continuation of a foreclosure of this
Mortgage or exercise of any other remedies hereunder based on such other
proceedings or judgments, and waives any right to seek to dismiss, stay, remove,
transfer or consolidate either any action under this Mortgage or such other
proceedings on such basis. The commencement or continuation of proceedings to
sell the Mortgaged Property in a trustee's sale, to foreclose this Mortgage or
the exercise of any other rights hereunder or the recovery of any judgment by
Mortgagee or the occurrence of any sale by the Mortgagee in any such proceedings
shall not prejudice, limit or preclude Mortgagee's right to commence or continue
24
one or more trustee's sales, foreclosure or other proceedings or obtain a
judgment against (or, in the case of a trustee's sale, to meet the statutory
requirements for, any such sale of) any other collateral (either in or outside
the State in which the Real Property is located) which directly or indirectly
secures the Secured Indebtedness, and Mortgagor expressly waives any objections
to the commencement of, continuation of, or entry of a judgment in such other
sales or proceedings or exercise of any remedies in such sales or proceedings
based upon any action or judgment connected to this Mortgagee, and Mortgagor
also waives any right to seek to dismiss, stay, remove, transfer or consolidate
either such other sales or proceedings or any sale or action under this Mortgage
on such basis. It is expressly understood and agreed that to the fullest extent
permitted by law, Mortgagee may, at its election, cause the sale of all
collateral which is the subject of a single trustee's sale or foreclosure action
at either a single sale or at multiple sales conducted simultaneously and take
such other measures as are appropriate in order to effect the agreement of the
parties to dispose of and administer all collateral securing the Secured
Indebtedness (directly or indirectly) in the most economical and least
time-consuming manner.
Section 12. JURY WAIVER. IT IS MUTUALLY AGREED BY AND BETWEEN
MORTGAGOR AND MORTGAGEE THAT THE RESPECTIVE PARTIES WAIVE TRIAL BY JURY IN ANY
ACTION, CLAIM, SUIT, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES
AGAINST THE OTHER ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS MORTGAGE AND/OR THE CONDUCT OF THE RELATIONSHIP BETWEEN
MORTGAGOR AND MORTGAGEE.
Section 13. Service of Process. In the event the Mortgagee brings any
action or commences any proceeding to enforce the provisions of this Mortgage,
service of copies of the summons and complaint and any other process which may
be served in any such action or proceeding may be made by mailing by registered
mail, return receipt requested, or by delivering a copy of such process to the
Mortgagor at its address referred to in Section 2 of Article IV of this
Mortgage, with a copy mailed by registered mail, return receipt requested, to
Gold ▇▇▇▇▇, Inc., c/o ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇ ▇▇▇▇▇, which is hereby irrevocably designated, empowered
and appointed by the Mortgagor as its agent to receive and accept on behalf of
the Mortgagor service of any summons, complaint, or such other process in any
such action or proceeding. Nothing in this Section shall affect the right of the
Mortgagee to serve legal process in any other manner permitted by law.
Section 14. Invalidity of Certain Provisions. If the lien of this
Mortgage is invalid or unenforceable as to any part of the Secured Indebtedness,
or if the lien is invalid or unenforceable as to any part of the Mortgaged
Property, the unsecured or partially secured portion of the Secured Indebtedness
shall be completely paid prior to the payment of the remaining and secured or
partially secured portion of the Secured Indebtedness, and all payments made on
the Secured Indebtedness, whether voluntary or under foreclosure or other
enforcement action or procedure, shall be considered to have been first paid on
and applied to the full payment of that portion of the Secured Indebtedness that
is not secured or fully secured by the lien of this Mortgaged Property.
25
ARTICLE IV
----------
MISCELLANEOUS
Section 1. Cumulative Rights. The rights and remedies herein
expressed to be vested in or conferred upon the Mortgagee shall be cumulative
and shall be in addition to and not in substitution for or in derogation of the
rights and remedies conferred by any applicable Law. The failure, at any one or
more times, of the Mortgagee to assert the right to declare the Secured
Indebtedness due, or the granting by the Mortgagee of any extension or
extensions of time of payment of the Secured Indebtedness either to the maker or
to any other person, or taking of other or additional security by the Mortgagee
for the payment thereof, or the release of any security, or the modification of
any of the terms of this Mortgage, the Intercreditor Agreement, the Credit
Agreement, the Note Agreement, the Notes, or any of the other Loan Documents, or
the waiver of or failure to exercise any right under any covenant or stipulation
herein contained shall not in any way affect this Mortgage nor the rights of the
Mortgagee hereunder, nor operate as a release from any liability under the
Intercreditor Agreement, the Credit Agreement, the Note Agreement, the Notes, or
any of the other Loan Documents evidencing the Secured Indebtedness, nor under
any covenant or stipulation therein contained, nor under any agreement assuming
the payment of said Secured Indebtedness.
Section 2. Notices. Any notice shall be conclusively deemed to have
been received by any party hereto and be effective on the day on which delivered
in writing (or if by facsimile communications equipment, the day delivered by
such equipment) to such party at the address set forth below (or at such other
address as such party shall specify to the other party in writing) or, if sent
by certified or registered mail, on the third (3rd) day after the day on which
mailed, addressed to such party at such address:
If to the
Mortgagor: Gold ▇▇▇▇▇, Inc.
c/o ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
26
With a copy to: Weil, Gotschal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No: ▇▇▇-▇▇▇-▇▇▇▇
Attn: Managing Partner, Real Estate Department
If to the
Mortgagee: Wachovia Bank, National Association
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇, Esq.
Section 3. Successors and Assigns. All of the terms, covenants,
provisions and conditions herein contained shall be for the benefit of, apply
to, and bind the heirs, executors, administrators, successors, and assigns of
the Mortgagor and the Mortgagee, and are intended and shall be held to be real
covenants running with the land, and the term "Mortgagor" shall also include any
and all subsequent owners and successors in title of the Mortgaged Property.
Section 4. Gender. When such interpretation is appropriate, any word
denoting gender used herein shall include all persons, natural or artificial,
and words used in the singular shall include the plural.
Section 5. Severability. If any court determines that any provision
of this Mortgage is void or unenforceable, the Mortgage shall remain in effect
in accordance with its terms excluding the provision declared void or
unenforceable, unless Mortgagee (in Mortgagee's exclusive discretion) determines
that the entire Mortgage should be terminated.
Section 6. Amendment. This Mortgage may not be changed or terminated,
or any term or provision thereof waived or discharged, except in writing signed
by the party against whom such change, termination, waiver or discharge is
sought. This Mortgage and all its terms, covenants, conditions, and provisions
shall run with the land and shall bind Mortgagor and Mortgagor's heirs, legal
representatives, successors, assigns, and any and all subsequent owners,
encumbrancers, and tenants of the Real Property and shall inure to the benefit
of Mortgagee and Mortgagee's successors, permitted assigns, and legal
representative and all subsequent holders of this Mortgage. Schedules "A" and
"B" annexed hereto are made a part of this Mortgage as though fully set forth
herein.
Section 7. Governing Law. This Mortgage shall be governed by and
construed in accordance with the internal laws of the State in which the Real
Property is located. Whenever possible, each provision of this Mortgage shall be
interpreted in such manner as to be effective and valid under applicable law,
27
but if any provision of this Mortgage shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remaining provisions of this
Mortgage.
Section 8. Limitation of Interest. It is the intent of Mortgagor and
Mortgagee in the execution of this Mortgage and all other Loan Documents to
contract in strict compliance with the usury laws governing the Secured
Indebtedness evidenced by the Loan Documents. In furtherance thereof, Mortgagor
and Mortgagee stipulate and agree that none of the terms and provisions
contained in the Loan Documents shall ever be construed to create a contract for
the use, forbearance or detention of money requiring payment of interest at a
rate in excess of the maximum interest rate permitted to be charged by the laws
governing the Loan Documents evidencing the Secured Indebtedness. Mortgagor or
any guarantor, endorser or other party now or hereafter becoming liable for the
payment of the Secured Indebtedness shall never be required to pay interest on
the Secured Indebtedness at a rate in excess of the maximum interest that may be
lawfully charged under the laws governing the Loan Documents evidencing the
Secured Indebtedness, and the provisions of this Section shall control over all
other provisions of the Credit Agreement, the Note Agreement, the Notes, the
A-Advanced Guaranty and the other Loan Documents and any other instrument
executed in connection herewith which may be in apparent conflict herewith. In
the event the Collateral Agent, any Lender, or any other holder of the Secured
Indebtedness shall collect monies that are deemed to constitute interest and
that would otherwise increase the effective interest rate on the Secured
Indebtedness to a rate in excess of that permitted to be charged by the usury
laws, all such sums deemed to constitute interest in excess of the legal rate
shall be applied in accordance with the provisions of the Credit Agreement.
Section 9. Conflict. Notwithstanding any other provision of this
Mortgage to the contrary, in the case of any conflict or inconsistency between
any provision of this Mortgage and the Credit Agreement, the provisions of the
Credit Agreement shall control.
MORTGAGOR HEREBY ACKNOWLEDGES THAT THIS MORTGAGE CONTAINS PROVISIONS AUTHORIZING
A CONFESSION OF JUDGMENT FOR THE POSSESSION OF THE MORTGAGED PROPERTY AND AFTER
CONSULTATION WITH INDEPENDENT LEGAL COUNSEL UNDERSTANDS THE EFFECTS AND
CONSEQUENCES OF SUCH AUTHORIZATION.
28
THE MORTGAGOR FURTHER DECLARES THAT THE MORTGAGOR HAS READ THIS MORTGAGE, HAS
SIGNED THIS MORTGAGE AS OF THE DATE AT THE TOP OF THE FIRST PAGE AND THE
MORTGAGOR ACKNOWLEDGES THAT IT HAS RECEIVED A TRUE AND COMPLETE COPY OF THIS
MORTGAGE.
IN WITNESS WHEREOF, the Mortgagor has duly caused this Mortgage to be duly
executed and delivered as of the day and year first above written.
ATTEST: Gold ▇▇▇▇▇, Inc.
______________________[SEAL] By: ______________________[SEAL]
Signed and Acknowledged
in the presence of:
----------------------------------
----------------------------------
The undersigned certifies that the residence address of Collateral Agent is ▇▇▇
▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
By:
-----------------------------------
On behalf of Mortgagee
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss:
COUNTY OF NEW YORK )
On the ___ day of ____________, 2002, before me, the undersigned,
personally appeared ___________________, personally known to me or proved to me
on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that she executed the
same in her capacity, and that by her signature on the instrument, the
individual, or the person upon behalf of which the individual acted, executed
the instrument.
-------------------------
Notary Public
[Notary Seal]
30
SCHEDULE "A"
------------
LEGAL DESCRIPTION
-----------------
31
SCHEDULE "B"
------------
PERMITTED ENCUMBRANCES
----------------------
The Permitted Liens as defined in Section 6.2 of the Credit Agreement.
32
EXHIBIT E
FORM OF NOTE
$_____________ New York, New York
as of ______, 2002
FOR VALUE RECEIVED, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC., a Delaware
corporation (the "Borrower") DOES HEREBY PROMISE TO PAY to the order of [INSERT
NAME OF LENDER] (the "Lender") at the office of Wachovia Bank, National
Association located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, in lawful money of the United States of America in immediately available
funds, the principal amount of ______________ DOLLARS ($______________), or the
aggregate unpaid principal amount of all Loans (as defined in the Credit
Agreement referred to below) made by the Lender to the Borrower pursuant to the
Credit Agreement, whichever is less, on such date or dates as is required by the
Credit Agreement, and to pay interest on the unpaid principal amount from time
to time outstanding hereunder, in like money, at such office and at such times
as set forth in said Credit Agreement.
The Borrower and any and all sureties, guarantors and
endorsers of this Note and all other parties now or hereafter liable hereon
severally waive grace, demand, presentment for payment, protest, notice of any
kind (including, but not limited to, notice of dishonor, notice of protest,
notice of intention to accelerate or notice of acceleration) and diligence in
collecting and bringing suit against any party hereto and agree to the extent
permitted by applicable law (i) to all extensions and partial payments, with or
without notice, before or after maturity, (ii) to any substitution, exchange or
release of any security now or hereafter given for this Note, (iii) to the
release of any party primarily or secondarily liable hereon, and (iv) that it
will not be necessary for any holder of this Note, in order to enforce payment
of this Note, to first institute or exhaust such holder's remedies against the
Borrower or any other party liable hereon or against any security for this Note.
The nonexercise by the holder of any of its rights hereunder in any particular
instance shall not constitute a waiver thereof in that or any subsequent
instance.
The Lender may, but is not obligated to, set forth on the
last page hereof such information as is designated on the last page hereof.
This Note is one of the promissory notes referred to in
Section 4.01(n) of that certain Credit, Security, Guaranty and Pledge Agreement
dated as of October __, 2002 (as the same may be amended, amended and restated,
supplemented or otherwise modified, renewed or replaced from time to time, the
"Credit Agreement") among the Borrower, the Guarantors referred to therein, the
Lenders referred to therein, and Wachovia Bank, National Association, as
Administrative Agent, Collateral Agent and Issuing Bank, and is entitled to the
benefits of the guarantees contained in the Credit Agreement, and is secured by
the security interests and pledges granted and made in the Credit Agreement and
the other security documents and guarantees referred to and described therein.
The Credit Agreement, among other things, contains provisions for optional and
mandatory prepayment and for acceleration of the maturity hereof upon the
occurrence of certain events, all as provided in the Credit Agreement.
In the event of a conflict between this Note and the Credit
Agreement, the provisions of the Credit Agreement will govern.
2
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
By:
----------------------------------------
Name:
Title:
3
[LAST PAGE OF NOTE]
Unpaid Name of
Principal Person
Payments Balance Making
Date Amount of Loan Principal Interest of Note Notation
---- -------------- --------- -------- ------- --------
4
EXHIBIT F
FORM OF CLOSING CERTIFICATE
THE UNDERSIGNED, [ ], [Executive Vice President and Chief Financial
Officer] of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc., (the "Borrower"), pursuant to the Credit,
Security, Guaranty and Pledge Agreement dated as of October __, 2002, (the
"Credit Agreement"; capitalized terms used but not defined herein shall have the
meanings assigned to them in the Credit Agreement), by and among the Borrower,
the Guarantors referred to therein, the Lenders referred to therein and Wachovia
Bank, National Association, as Administrative Agent, Collateral Agent and
Issuing Bank, does hereby certify on behalf of the Company as follows:
1. No Material Adverse Effect has occurred since June 30, 2002, except
for matters disclosed in writing to the Administrative Agent;
2. No litigation, inquiry, injunction or restraining order is pending,
entered or threatened which involves the Credit Agreement or any of
the other Fundamental Documents or which could reasonably be expected
to have a Material Adverse Effect;
3. All required consents and approvals have been obtained with respect
to the transactions contemplated by the Credit Agreement from all
Governmental Authorities with jurisdiction over the business and
activities of any Credit Party and from any other entity whose
consent, waiver or approval is required pursuant to the terms of
existing contracts to which any of the Credit Parties is bound;
4. The transactions contemplated under the Credit Agreement do not
violate any provision of Applicable Law, or any order of any court or
other agency of the United States or any state thereof applicable to
any of the Credit Parties or any of their respective properties or
assets; and
5. Each of the representations and warranties set forth in Article 3 of
the Credit Agreement and in any other Fundamental Document in
existence on the date hereof are true and correct in all material
respects, and no Default or Event of Default under the terms of the
Credit Agreement has occurred and is continuing.
IN WITNESS WHEREOF, I have signed my name this ____ day of _______,
2002.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
By:
---------------------------------
Name:
Title:
EXHIBIT G
INTERCREDITOR AND COLLATERAL AGENCY
AGREEMENT, dated as of October __,
2002 (this "Agreement"), among (i)
Wachovia Bank, National Association,
as collateral agent hereunder (in such
capacity, and together with its
successors and assigns, the
"Collateral Agent"), (ii) Wachovia
Bank, National Association as
administrative agent for the Issuing
Bank and the Lenders referred to below
(in such capacity, and together with
its successors and assigns, the
"Administrative Agent"), (iii) the
holders of the Notes issued under the
Note Agreement referred to below which
are signatories hereto, (together with
their successors and assigns,
collectively the "Noteholders"), (iv)
Wachovia Bank, National Association,
as the holder of the A-Advanced Notes
referred to below (in such capacity,
and together with its successors and
assigns, the "A-Advanced Lender") and
(v) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc. (the
"Borrower").
INTRODUCTORY STATEMENT
----------------------
WHEREAS, the Administrative Agent, the Collateral Agent, the Issuing
Bank and the Lenders have entered into a Credit, Security, Guaranty and Pledge
Agreement, dated as of October 1, 2002 (as the same may be amended, modified,
supplemented, replaced or refinanced from time to time, the "Credit Agreement"),
with the Borrower and certain of its Subsidiaries pursuant to which the Lenders
have agreed to make loans and other extensions of credit to the Borrower;
WHEREAS, as security for the Borrower's and such Subsidiaries'
obligations under the Credit Agreement, the Collateral Agent has been granted or
will be granted a security interest in the Credit Agreement Collateral (as
defined herein);
WHEREAS, the Noteholders have entered into a Note Agreement, dated as
of October __, 2002 (as the same may be amended, modified, supplemented,
replaced or refinanced from time to time, the "Note Agreement"), with the
Borrower and certain of its Subsidiaries pursuant to which the Borrower has
issued $135,000,000 of its 9.89% Senior Secured Notes due October 1, 2005 (the
"Notes");
WHEREAS, the A-Advanced Lender has received from A-Advanced those
certain promissory notes (as the same may be amended, modified, supplemented,
replaced or refinanced from time to time, the "A-Advanced Notes") and, in
connection therewith, the Borrower has delivered that certain Guaranty, dated as
of October 1, 2002 in favor of the A-Advanced Lender (the "A-Advanced Guaranty")
pursuant to which the Borrower has guaranteed the obligations of A-Advanced to
the A-Advanced Lender on the terms set forth therein;
WHEREAS, in order to provide guarantees (in the case of the
Guarantors) and security (in the case of the Borrower and the Guarantors) to the
Noteholders for the Note Obligations (as defined herein) and to the A-Advanced
Lender for the A-Advanced Guaranty Obligations (as defined herein), the Borrower
and the Guarantors have entered into a Guaranty, Security and Pledge Agreement,
dated as of October 1, 2002, in favor of the Collateral Agent for the benefit of
the Noteholders and the A-Advanced Lender (as the same may be amended, modified,
supplemented or replaced from time to time, the "Noteholder and A-Advanced
Lender Guaranty and Security Agreement");
WHEREAS, the execution of this Agreement is required by the terms of
the Credit Agreement, the Note Agreement and by the A-Advanced Lender; and
WHEREAS, the parties hereto desire to enter into this Agreement with
respect to the exercise of certain rights, remedies and options by the
respective parties as secured parties hereunder and under the aforementioned
documents.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions. (a) The following terms as used herein shall
have the following meanings:
"A-Advanced" shall mean A-Advanced Mini-Storage, LLC.
"A-Advanced Guaranty" shall have the meaning given to such term in
the introductory statement hereof.
"A-Advanced Guaranty Obligations" shall mean the guaranty by the
Borrower pursuant to the A-Advanced Guaranty to pay amounts owing to the
A-Advanced Lender with respect to the A-Advanced Notes (subject to a
$2,286,877.00 limit on the principal amount of A-Advanced Notes guaranteed as
set forth therein) and the guaranty by the Guarantors to pay all amounts owing
to the A-Advanced Lender under the A-Advanced Guaranty and all other amounts
owing to the A-Advanced Lender in connection therewith.
"A-Advanced Lender" shall have the meaning given to such term in the
preamble paragraph hereof.
"A-Advanced Lender Exposure" shall mean, at any time, the principal
amount of the A-Advanced Notes (not to exceed $2,286,877.00 in principal amount
of A-Advanced Notes) guaranteed by the Borrower pursuant to the A-Advanced
Guaranty as set forth therein.
"A-Advanced Notes" shall have the meaning given to such term in the
introductory statement hereof.
"Administrative Agent" shall have the meaning given to such term in
the preamble paragraph hereof.
"Borrower" shall have the meaning given to such term in the preamble
paragraph hereof.
"Cash Equivalents" shall mean any of the following: (i) full faith
and credit obligations of the United States of America, or fully guaranteed as
to interest and principal by the full faith and credit of the United States of
America, maturing in not more than one year from the date such investment is
2
made; (ii) time deposits and certificates of deposit having a final maturity of
not more than one year after the date of issuance thereof of any commercial bank
incorporated under the laws of the United States of America or any state thereof
or the District of Columbia, which bank is a member of the Federal Reserve
System and has a combined capital and surplus of not less than $1,000,000,000.00
and with a senior unsecured debt credit rating of at least "A" by ▇▇▇▇▇'▇
Investors Service, Inc. or "A" by Standard & Poor's Ratings Services; (iii)
commercial paper of companies, banks, trust companies or national banking
associations incorporated or doing business under the laws of the United States
of America or one of the States thereof, in each case having a remaining term
until maturity of not more than one hundred eighty (180) days from the date such
investment is made and rated at least P-1 by ▇▇▇▇▇'▇ Investors Service, Inc. or
at least A-1 by Standard & Poor's Ratings Group; (iv) repurchase agreements with
any financial institution having combined capital and surplus of not less than
$1,000,000,000.00 with a term of not more than seven (7) days for underlying
securities of the type referred to in clause (i) above; and (v) money market
funds which invest primarily in the Cash Equivalents set forth in the preceding
clauses (i)-(iv).
"Collateral" shall mean, collectively (i) the Credit Agreement
Collateral, (ii) the Noteholder and A-Advanced Lender Collateral and (iii) all
real property and related assets with respect to which a Mortgage is executed
and delivered, together with all proceeds of all of the foregoing.
"Collateral Account" shall have the meaning specified in Section 8(a)
hereof.
"Collateral Agent" shall have the meaning given to such term in the
preamble paragraph hereof.
"Collateral Agent Fees" shall mean all fees, costs, indemnification
and expenses of the Collateral Agent of the types described in Sections 15 and
16 hereof.
"Credit Agreement" shall have the meaning given such term in the
introductory statement hereof.
"Credit Agreement Collateral" shall mean the "Collateral" under and
as defined in the Credit Agreement.
"Credit Parties" shall mean, collectively, the Borrower and each of
the Guarantors.
"Event of Default" shall mean (i) an "Event of Default" under and as
defined in the Credit Agreement, (ii) an "Event of Default" under and as defined
in the Note Agreement, (iii) a "Default" by the Borrower under and as defined in
the A-Advanced Guaranty or (iv) an "Event of Default" by any Credit Party under
and as defined in the Noteholder and A-Advanced Lender Guaranty and Security
Agreement.
"Guarantors" shall mean each of the Subsidiaries of the Borrower who
have guaranteed the Lender Obligations, the Note Obligations and the A-Advanced
Guaranty.
3
"Issuing Bank" shall mean Wachovia Bank, National Association in its
capacity as issuing bank under the Credit Agreement.
"Lender Obligations" shall mean the "Obligations" as such term is
defined in the Credit Agreement.
"Lenders" shall mean, collectively, the lenders set forth on the
signature pages to the Credit Agreement and their respective successors and
assigns.
"Mortgage" shall mean a Mortgage, Open End Mortgage, Deed of Trust,
Trust Deed, Deed to Secure Debt, Credit Line Deed of Trust or Assignment of
Rents, executed by the applicable Credit Party in favor of the Collateral Agent
for the benefit of the Lenders, the Noteholders and/or the A-Advanced Lender, as
such document may be amended, supplemented, or otherwise modified from time to
time.
"Note Agreement" shall have the meaning given to such term in the
introductory statement hereof.
"Noteholder and A-Advanced Lender Collateral" shall mean the
"Collateral" under and as defined in the Noteholder and A-Advanced Lender
Guaranty and Security Agreement.
"Noteholder and A-Advanced Lender Guaranty and Security Agreement"
shall have the meaning given to such term in the introductory statement hereof.
"Note Obligations" shall mean at any date, the obligations of the
Borrower (and any other obligor under the Note Agreement including, without
limitation, any guarantor of the Notes) to pay principal of and interest on the
Notes when due and payable, whether at maturity, by acceleration, call for
redemption or repurchase, or otherwise, and all other amounts due or to become
due under or in connection with the Note Agreement and the Notes, including,
without limitation, the "Make-Whole Amount" (as defined therein) and the
performance of all other obligations to the Noteholders under the Note
Agreement, the Notes and the Noteholder and A-Advanced Lender Guaranty and
Security Agreement according to the terms thereof.
"Noteholders" shall have the meaning given to such term in the
introductory statement hereof.
"Notes" shall have the meaning given to such term in the introductory
statement hereof.
"Notice of Default" shall mean a written notice delivered to the
Collateral Agent either (i) by the Administrative Agent stating that an "Event
of Default" has occurred under the provisions of the Credit Agreement or (ii)
the Required Second Lien Holders, stating that an "Event of Default" has
occurred under the provisions of the Note Agreement, a "Default" by the Borrower
has occurred under the A-Advanced Guaranty or an "Event of Default" has occurred
under the provisions of the Noteholder and A-Advanced Lender Guaranty and
Security Agreement.
4
"Outstanding" shall mean, when used with respect to the Secured
Obligations, any Secured Obligations then or theretofore issued or incurred by
any Credit Party.
"Person" shall mean any natural person, corporation, partnership,
trust, joint venture, association, company, estate, business entity,
unincorporated organization or government or any agency or political subdivision
thereof.
"Required Lenders" shall have the meaning given to such term in the
Credit Agreement.
"Required Second Lien Holders" shall mean, at any time, Noteholders
and/or the A-Advanced Lender who hold in the aggregate greater than 50% of the
principal amount of the sum of (i) the then outstanding Notes plus (ii) the
A-Advanced Lender Exposure.
"Required Secured Parties" shall mean (i) so long as any Lender
Obligations remain outstanding and/or the Commitments of the Lenders under the
Credit Agreement have not been terminated, the Administrative Agent (acting on
behalf of and as instructed by the Required Lenders and, if required by the
terms of the Credit Agreement, the Issuing Bank and (ii) at any time thereafter,
the Required Second Lien Holders.
"Responsible Officer" shall mean, with respect to the Borrower or any
other Credit Party, the president, vice president, chief financial officer,
chief accounting officer, secretary, treasurer or the general partner or
managing partner of such entity (or of the general partner or managing partner
of such entity, if not a natural person), as the case may be.
"Secured Documents" shall mean (i) the Credit Agreement, (ii) the
Note Agreement and the Notes, (iii) the A-Advanced Guaranty and (iv) the
Noteholder and A-Advanced Lender Guaranty and Security Agreement, as such
documents may be amended, modified, supplemented, replaced or refinanced from
time to time.
"Secured Obligations" shall mean (i) the Lender Obligations, (ii) the
Note Obligations, (iii) the A-Advanced Guaranty Obligations and (iv) any other
sums payable by the Credit Parties under this Agreement (including, without
limitation, Collateral Agent Fees).
"Secured Parties" shall mean at any time the holders or obligees of
the Secured Obligations.
"Security Documents" shall mean (i) the Credit Agreement, (ii) the
A-Advanced Guaranty, (iii) the Noteholder and A-Advanced Lender Guaranty and
Security Agreement and (iv) the Mortgages, as such documents may be amended,
modified, supplemented, replaced or refinanced from time to time.
"Subsidiary" shall mean with respect to any Person, any corporation,
association, joint venture, partnership or other business entity (whether now
existing or hereafter organized) of which at least a majority of the voting
stock or other ownership interests having ordinary voting power for the election
of directors (or the equivalent) is, at the time as of which any determination
is being made, owned or controlled by such Person or one or more subsidiaries of
such Person or by such Person and one or more subsidiaries of such Person.
5
(b) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section and subsection
references are of this Agreement unless otherwise specified.
SECTION 2. Appointment As Collateral Agent; Notice of Default;
Enforcement. ----------------------------------------------------
------------
(a) Each of the Administrative Agent (on behalf of the Issuing Bank
and the Lenders), each Noteholder and the A-Advanced Lender hereby appoints and
authorizes the Collateral Agent to act as its agent in enforcing its respective
rights in respect of the Collateral and administering the Collateral in
accordance with the terms and provisions of this Agreement.
(b) Upon receipt by the Collateral Agent of a Notice of Default, the
Collateral Agent shall promptly notify in writing the Borrower and each of the
Administrative Agent, each Noteholder and the A-Advanced Lender not sending such
Notice of Default of the receipt of such Notice of Default and the contents
thereof. So long as such Notice of Default is in effect, the Collateral Agent
shall exercise the rights and remedies provided in this Agreement and the
Security Documents subject, after the receipt of such Notice of Default, to the
direction of the Required Secured Parties as provided herein and therein. The
Collateral Agent shall not be empowered to exercise any remedy hereunder or
under the Security Documents unless a Notice of Default is in effect.
(i) A Notice of Default shall become effective upon receipt
thereof by the Collateral Agent. A Notice of Default, once effective, shall
remain in effect unless and until it is canceled as provided in Section 2(b)(ii)
hereof.
(ii) Any Person(s) who has given a Notice of Default shall be
entitled to cancel such Notice of Default by delivering a written notice of
cancellation to the Collateral Agent and thereafter such Notice of Default shall
no longer be in effect and the Collateral Agent shall no longer exercise any
rights or remedies hereunder or under the Security Documents. The Collateral
Agent shall immediately notify the Borrower and each of the Administrative
Agent, each Noteholder and the A-Advanced Lender not cancelling such Notice of
Default as to the receipt and contents of any such notice of cancellation of any
Notice of Default.
(c) If a Notice of Default is in effect, the Collateral Agent,
subject to the provisions of Section 2(e)(i) hereof, shall have the right and
power to institute and maintain such suits and proceedings as it may deem
appropriate to protect and enforce the rights vested in it by this Agreement and
the Security Documents and (ii) may either after entry, or without entry,
proceed by suit or suits at law or in equity to enforce such rights and to
foreclose upon the Collateral and to sell all or, from time to time, any of the
Collateral under the judgment or decree of a court of competent jurisdiction.
(d) All of the powers, remedies and rights of the Collateral Agent as
set forth in this Agreement may be exercised by the Collateral Agent in respect
of the Security Documents as though set forth in full therein and all of the
powers, remedies and rights of the Collateral Agent as set forth in the Security
Documents may be exercised from time to time as herein and therein provided.
6
(e) The Required Secured Parties shall have the right, by one or more
instruments in writing executed and delivered to the Collateral Agent, to direct
the time, method and place of conducting any proceeding for any right or remedy
available to the Collateral Agent, or of exercising any trust or power conferred
on the Collateral Agent, or the appointment of a receiver, or to direct the
taking or the refraining from taking of any action authorized by this Agreement
or the Security Documents; provided, that (i) such direction shall not conflict
with the provisions of any law or of this Agreement or of the Security
Documents, (ii) the Collateral Agent shall be adequately secured and indemnified
as provided in Section 19(c) hereof and (iii) such direction shall not include
any instructions to the Collateral Agent to cease exercising all rights and
remedies which direction may only be given as provided in Section 2(b)(ii)
hereof. Nothing in this Section 2(e) shall impair the right of the Collateral
Agent in its discretion to take any action or omit to take any action which it
deems proper and which is not inconsistent with a direction of the Required
Secured Parties. In the absence of such direction, the Collateral Agent shall
have no duty to take or refrain from taking any action unless explicitly
required herein.
(f) The Collateral Agent may at any time, after the delivery of a
Notice of Default request directions from the Required Secured Parties as to any
course of action or other matter relating hereto. Subject to the provisions of
the Credit Agreement, directions given by the Required Secured Parties to the
Collateral Agent hereunder that are not inconsistent with the Noteholders' or
the A-Advanced Lender's express rights under this Agreement shall be binding on
the Noteholders and the A-Advanced Lender and their respective successors and
assigns for all purposes.
SECTION 3. Remedies Not Exclusive. (a) No remedy conferred upon or
reserved to the Collateral Agent herein or in the Security Documents is intended
to be exclusive of any other remedy or remedies, but every such remedy shall be
cumulative and shall be in addition to every other remedy conferred herein or in
the Security Documents or now or hereafter existing at law or in equity or by
statute.
(b) No delay or omission by the Collateral Agent to exercise any
right, remedy or power hereunder or under the Security Documents shall impair
any such right, remedy or power or shall be construed to be a waiver thereof or
an acquiescence therein, and every right, power and remedy given by this
Agreement or the Security Documents to the Collateral Agent may be exercised
from time to time and as often as may be deemed expedient by the Collateral
Agent.
(c) If the Collateral Agent shall have proceeded to enforce any
right, remedy or power under this Agreement or the Security Documents and the
proceeding for the enforcement thereof shall have been discontinued or abandoned
for any reason or shall have been determined adversely to the Collateral Agent,
then the Credit Parties, the Collateral Agent and the Secured Parties shall,
subject to any determination in such proceeding, severally and respectively be
restored to their former positions and rights hereunder and under the Security
Documents with respect to the Collateral and in all other respects, and
thereafter all rights, remedies and powers of the Collateral Agent shall
continue as though no such proceeding had been taken.
7
(d) Subject to applicable law, all rights of action and of asserting
claims upon or under this Agreement and the Security Documents may be enforced
by the Collateral Agent without the possession of the Security Documents or any
instrument evidencing any Secured Obligation or the production thereof at any
trial or other proceeding relative thereto, and any suit or proceeding
instituted by the Collateral Agent shall be, subject to Sections 11 and
22(b)(ii) hereof, brought in its name as Collateral Agent and any recovery of a
judgment shall be held as part of the Collateral.
SECTION 4. Waiver and Estoppel. (a) Each of the Credit Parties, each
Noteholder and the A-Advanced Lender agrees, to the extent it may lawfully do
so, that it will not, at any time in any manner whatsoever, claim or take the
benefit or advantage of any appraisement, valuation, stay, extension,
moratorium, turnover or redemption law, or any law permitting it to direct the
order in which the Collateral shall be sold, now or at any time hereafter in
force, which may delay, prevent or otherwise affect the performance or
enforcement of this Agreement or the Security Documents and hereby waives all
benefit or advantage of all such laws and covenants that it will not hinder,
delay or impede the execution of any power granted to the Collateral Agent in
this Agreement or the Security Documents but will suffer and permit the
execution of every such power as though no such law were in force.
(b) Each of the Credit Parties, each Noteholder and the A-Advanced
Lender waives and releases, to the extent it may lawfully do so, on behalf of
itself and all who claim through or under it, including without limitation, any
and all subsequent creditors, vendees, assignees and lienors, all rights to
demand or to have any marshaling of the Collateral upon any sale, whether made
under any power of sale granted herein or in the Security Documents or pursuant
to judicial proceedings or upon foreclosure or any enforcement of this Agreement
or the Security Documents and consents and agrees that all the Collateral may at
any such sale be offered and sold as an entirety.
(c) Each of the Credit Parties, each Noteholder and the A-Advanced
Lender waives, to the extent permitted by applicable law, presentment, demand,
protest and any notice of any kind (except notices explicitly required hereunder
or under the Security Documents) in connection with this Agreement and the
Security Documents and any action taken by the Collateral Agent with respect to
the Collateral.
SECTION 5. Limitation on Collateral Agent's Duty in Respect of
Collateral. Beyond its duties as to the custody thereof expressly provided
herein or in the Security Documents and to account to the Secured Parties and
the Credit Parties for moneys and other property received by it hereunder or
under the Security Documents, the Collateral Agent shall not have any duty to
the Credit Parties or to the Secured Parties as to any Collateral in the
possession or control of any of its agents or nominees, or any income thereon or
as to the preservation of rights against prior parties or any other rights
pertaining thereto.
SECTION 6. Limitation by Law. All rights, remedies, powers and
waivers provided by this Agreement may be exercised only to the extent that the
exercise thereof does not violate any applicable provision of law, and all the
provisions hereof are intended to be subject to all applicable mandatory
provisions of law which may be controlling and to be limited by the extent
necessary so that they will not render this Agreement or any Security Document
8
invalid, unenforceable in whole or in part or not entitled to be recorded,
registered or filed under provisions of any applicable law.
SECTION 7. Priority of Security Interests; Rights of Secured Parties
under Secured Documents. (a) Notwithstanding the order or time of attachment,
the order, time or manner of perfection or the order or time of filing or
recordation of any document or instrument or other method of perfecting a
security interest in favor of the Lenders, the Noteholders or the A-Advanced
Lender in any of the Collateral, the priority of any security interests and
liens in the Collateral shall be, with respect to the Lenders and the Lender
Obligations, a first priority security interest, and with respect to the
Noteholders and the Noteholder Obligations and the A-Advanced Lender and the
A-Advanced Lender Obligations, a second priority security interest, such second
priority security interest to be pari passu as between the Noteholders and the
A-Advanced Lender.
(b) Notwithstanding any other provision of this Agreement or the
Security Documents, as between each Secured Party on the one hand and the Credit
Parties on the other hand, the right of such Secured Party to receive payment of
the Secured Obligations held by such Secured Party when due (whether at the
stated maturity thereof, by acceleration or otherwise) as expressed in the
related Secured Document or other instrument evidencing, or agreement governing,
a Secured Obligation, and to institute suit against any Credit Party for the
enforcement of such payment on or after such due date, and the obligation of the
Credit Parties to pay such Secured Obligation when due, shall not be impaired or
affected by this Agreement.
SECTION 8. Collateral Account; Distributions. (a) Upon the receipt by
the Collateral Agent of a Notice of Default, at the direction of the Required
Secured Parties, there shall be established and, at all times thereafter until
this Agreement shall have terminated, there shall be maintained with the
Collateral Agent at the office of the Collateral Agent, an account which shall
be entitled the "▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Collateral Account" (the "Collateral Account").
All moneys which are required by this Agreement or the Security Documents to be
delivered to the Collateral Agent while a Notice of Default is in effect or
which are received by the Collateral Agent or any agent or nominee of the
Collateral Agent in respect of the Collateral, whether in connection with the
exercise of the remedies provided in this Agreement or the Security Documents or
otherwise, while a Notice of Default is in effect, shall be deposited in the
Collateral Account and thereafter shall be held by the Collateral Agent as part
of the Collateral and applied in accordance with the terms of this Agreement.
Upon the cancellation of any Notice of Default pursuant to Section 2(b)(ii)
hereof, the Collateral Agent shall (subject to the first sentence of Section
8(d)) hereof cause all funds on deposit in the Collateral Account to be paid
over to the Borrower.
(b) All right, title and interest in and to the Collateral Account
shall vest in the Collateral Agent, and funds on deposit in the Collateral
Account shall constitute part of the Collateral. The Collateral Account shall be
subject to the exclusive dominion and control of the Collateral Agent in
accordance with the terms hereof.
(c) The Collateral Agent shall invest and reinvest monies on deposit
in the Collateral Account at any time upon the written instructions of the
Required Secured Parties in Cash Equivalents. All such investments and the
9
interest and income received thereon and the net proceeds realized on the sale
thereof shall be held in the Collateral Account as part of the Collateral.
(d) The Collateral Agent shall have the right (pursuant to Section 17
hereof) at any time to apply moneys held by it in the Collateral Account to the
payment of due and unpaid Collateral Agent Fees. All remaining money held by the
Collateral Agent in the Collateral Account or received by the Collateral Agent
while a Notice of Default is in effect shall, to the extent available for
distribution (it being understood that the Collateral Agent may liquidate
investments prior to maturity in order to make a distribution pursuant to this
Section 8), be distributed by the Collateral Agent in the following order of
priority:
First: to the Collateral Agent for any unpaid Collateral Agent Fees;
provided, however, that nothing herein is intended to relieve the Borrower of
its obligations to pay such costs, fees, expenses or liabilities from funds
other than funds deposited into the Collateral Account or funds representing
proceeds of the Collateral;
Second: to the Administrative Agent, in an amount equal to all
reasonable costs, expenses and disbursements of the Administrative Agent;
Third: to the Administrative Agent, in an amount equal to the unpaid
amount of all Lender Obligations then Outstanding;
Fourth: to the Noteholders and the A-Advanced Lender, on a pro rata
basis, in an amount equal to the unpaid amount of Note Obligations and
A-Advanced Guaranty Obligations then Outstanding and owed to the Noteholders and
the A-Advanced Lender, respectively; and
Fifth: any surplus then remaining shall be paid to the Borrower or
its successors or assigns or to whomsoever may be lawfully entitled to receive
the same or as a court of competent jurisdiction may direct.
(e) The Collateral Agent shall make all payments and distributions
under this Section 8: (i) on account of Lender Obligations, to the
Administrative Agent for redistribution in accordance with the provisions of the
Credit Agreement, (ii) on account of the Note Obligations, to each of the
Noteholders on a pro rata basis and (iii) on account of the Guaranty Obligations
to the A-Advanced Lender.
(f) In making the determinations and allocations required by Section
8(d) hereof, the Collateral Agent may rely upon information supplied by the
Administrative Agent as to the amounts payable with respect to Lender
Obligations, upon information supplied by the Noteholders as to the amounts
payable with respect to the Note Obligations, and upon information supplied by
the A-Advanced Lender with respect to A-Advanced Guaranty Obligations and the
Collateral Agent shall have no liability to the Credit Parties or any of the
Secured Parties for actions taken in reliance on such information. The
Collateral Agent shall supply copies of such information to the Borrower
promptly upon receipt thereof. All distributions made by the Collateral Agent
pursuant to Section 8(d) hereof shall be (subject to any decree of any court of
competent jurisdiction) final, and the Collateral Agent shall have no duty to
inquire as to the application by the Administrative Agent, any Noteholders or
the A-Advanced Lender of any amounts distributed to them.
10
(g) If, through the operation of any bankruptcy, reorganization,
insolvency or other laws or otherwise, the Collateral Agent's security interest
under any of the Security Documents is enforced with respect to some, but not
all, of the Secured Obligations then Outstanding, the Collateral Agent shall
nonetheless apply the proceeds of the Collateral for the benefit of the Secured
Parties in the proportions and subject to the priorities specified herein.
SECTION 9. Delegation of Duties. The Collateral Agent may execute any
of the powers hereof and perform any duty hereunder either directly or by or
through agents or attorneys-in-fact, who may include officers and employees of
the Borrower; provided, that the Collateral Agent shall so execute and perform
any such duty by or through such Person (including the Administrative Agent) as
the Required Secured Parties may direct. The Collateral Agent shall be entitled
to the advice of counsel selected by the Collateral Agent concerning all matters
pertaining to such powers and duties. The Collateral Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it without bad faith, gross negligence or willful misconduct.
SECTION 10. Reliance by Collateral Agent. (a) Whenever in the
administration of this Agreement or the Security Documents the Collateral Agent
shall deem it necessary or desirable that a factual matter be proved or
established in connection with the Collateral Agent taking, suffering or
omitting any action hereunder, such matter (unless other evidence in respect
thereof is herein specifically prescribed) may be deemed to be conclusively
proved or established by a certificate of a Responsible Officer of the Borrower
delivered to the Collateral Agent, and such certificate shall be full warrant to
the Collateral Agent for any action taken, suffered or omitted in reliance
thereon in compliance with the Agreement, the Secured Documents, and the
Security Documents, subject, however, to the provisions of Section 11 hereof.
(b) The Collateral Agent may consult with counsel, accountants, or
other experts, and any opinion of counsel or opinion of accountants or other
experts shall be full and complete authorization and protection in respect of
any action taken or suffered by it hereunder or under the Security Documents in
accordance therewith. The Collateral Agent shall have the right at any time to
seek instructions concerning the administration of this Agreement and the
Security Documents from any court of competent jurisdiction.
(c) The Collateral Agent may rely, and shall be fully protected in
acting, upon any resolution, statement, certificate, instrument, opinion,
report, notice, request, consent, order, bond or other paper or document which
it has no reason to believe to be other than genuine and to have been signed or
presented by the proper party or parties or, in the case of cables, telecopies
and telexes, to have been sent by the proper party or parties. In the absence of
its bad faith, gross negligence or willful misconduct, the Collateral Agent may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished to the
Collateral Agent and conforming to the requirements of this Agreement or the
Security Documents.
(d) The Collateral Agent shall not be under any obligation to
exercise any of the rights or powers vested in the Collateral Agent by this
Agreement (including, without limitation, Section 8(d)) hereof and the Security
Documents unless the Collateral Agent shall have been provided adequate security
and indemnity against the costs, expenses and liabilities which may be incurred
11
by it in connection therewith, including such reasonable advances as may be
requested by the Collateral Agent.
(e) Upon any application or demand by the Borrower to the Collateral Agent to
take or permit any action under any of the provisions of this Agreement or the
Security Documents, the Collateral Agent may require that the Borrower furnish
to the Collateral Agent a certificate of a Responsible Officer stating that all
conditions precedent, if any, provided for in this Agreement, in the Security
Documents or in any Secured Document relating to the proposed application or
demand have been satisfied.
(f) In any case in which the Collateral Agent shall be required or
permitted to determine whether any proceeds of the sale or other disposition of
any property shall be allocated to the Collateral Account, or otherwise to make
any determination as to the extent to which the lien of Section 17 hereof or the
Security Documents secures any Secured Obligations, the Collateral Agent is
authorized, at the cost and expense of the Borrower and without any direction
from, or requirements for consent of or authorization by any Secured Party to
institute proceedings in a court of competent jurisdiction for the obtaining of
any authoritative determination of such matter. If the Collateral Agent
institutes any such proceeding, it shall give prompt written notice thereof to
the Administrative Agent, each of the Noteholders and the A-Advanced Lender, and
the Borrower shall afford each of them the opportunity to participate in such
proceeding.
SECTION 11. Limitations and Duties of Collateral Agent. (a) The
Collateral Agent shall be obligated to perform such duties and only such duties
as are specifically set forth in this Agreement and the Security Documents, and
no implied covenants or obligations shall be read into this Agreement or the
Security Documents against the Collateral Agent. If and so long as a Notice of
Default is in effect, the Collateral Agent shall, subject to the provisions of
Section 2(b) hereof, exercise the rights and powers vested in it by this
Agreement and the Security Documents, and the Collateral Agent shall not be
liable with respect to any action taken by it, or omitted to be taken by it, in
accordance with the direction of the Required Secured Parties.
(b) Except as herein otherwise expressly provided, the Collateral
Agent shall not be under any obligation to take any action which is
discretionary with the Collateral Agent under the provisions hereof or of the
Security Documents except upon the written direction of the Required Secured
Parties. Upon written request by the Administrative Agent, any Noteholder, or
the A-Advanced Lender, the Collateral Agent shall make available for inspection
and copying by the Administrative Agent, such Noteholder or the A-Advanced
Lender each certificate or other paper furnished to the Collateral Agent by the
Borrower under or in respect of this Agreement, the Security Documents or the
Collateral.
(c) No provision of this Agreement or of the Security Documents shall
be deemed to impose any duty or obligation on the Collateral Agent to perform
any act or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal, or in which the
Collateral Agent shall be legally unqualified or incompetent, to perform any
such act or acts or to exercise any such right, power, duty or obligation or if
such performance or exercise would constitute doing business by the Collateral
Agent in such jurisdiction or imposes a tax on the Collateral Agent by reason
thereof.
12
SECTION 12. Moneys to be Held in Trust. All moneys received by the
Collateral Agent under or pursuant to any provision of this Agreement or the
Security Documents (except Collateral Agent Fees) shall be held in trust for the
purposes for which they were paid or are held.
SECTION 13. Delivery of Secured Documents. Upon or before the
execution and delivery of this Agreement, the Borrower shall deliver to the
Collateral Agent true and complete copies of all Secured Documents as in effect
at such time. The Borrower shall deliver to the Collateral Agent, promptly upon
the execution thereof, a true and complete copy of any amendment, modification
or supplement to any Secured Document, entered into after such time.
SECTION 14. Information as to the Secured Parties, Administrative
Agent, Noteholders, and A-Advanced Lender. The Borrower shall promptly deliver
to the Collateral Agent, from time to time upon request of the Collateral Agent,
a list setting forth as of a date not more than 30 days prior to the date of
such delivery, (i) the amount and type of the Outstanding Lender Obligations and
the name and address of the Administrative Agent, (ii) the amount and type of
Outstanding Note Obligations and the name and address of each Noteholder and
(iii) the amount of Outstanding A-Advanced Guaranty Obligations.
SECTION 15. Compensation; Expenses. The Borrower agrees to pay to the
Collateral Agent, from time to time upon demand, (i) reasonable compensation
(which shall not be limited by any provision of law in regard to compensation of
fiduciaries or of a trustee of an express trust) for its services hereunder and
under the Security Documents and (ii) all of the reasonable fees, costs and
expenses of the Collateral Agent (including, without limitation, the reasonable
fees and disbursements of its counsel and such special counsel, accountants or
other experts as the Collateral Agent may elect to retain in the exercise of its
reasonable judgment) (A) arising in connection with the preparation, execution,
delivery, modification, restatement, amendment or termination of this Agreement
and the Security Documents or the enforcement of any of the provisions hereof or
thereof or (B) incurred or required to be advanced in connection with the
administration of the Collateral, the sale or other disposition or the custody
or release of Collateral pursuant to the Security Documents and the
preservation, protection or defense of the Collateral Agent's rights under this
Agreement and the Security Documents and in and to the Collateral.
SECTION 16. Indemnification. The Borrower agrees to pay, indemnify,
and hold the Collateral Agent harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including without limitation, the reasonable fees and disbursements of
counsel) or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement and the Security Documents, unless arising from the breach, bad faith,
negligence or willful misconduct of the Collateral Agent (including, without
limitation, indemnification of the Collateral Agent for liabilities of the
Collateral Agent for the net amount of taxes (after taking account of any
deduction, credit or other tax reduction or benefit available by reason of the
imposition of any such tax) in any jurisdiction in which the Collateral Agent
would not otherwise be subject to tax except by reason of its acting under this
Agreement or the Security Documents (directly or through agents, separate
Collateral Agents or co-Collateral Agents); provided, that such indemnification
for taxes (a) shall apply only (i) in respect of taxes attributable to the
13
performance of the Collateral Agent's obligations as Collateral Agent hereunder
and (ii) to the extent that the Collateral Agent, using reasonable efforts,
shall have been unable to avoid or minimize the same as contemplated by Section
22 hereof and (b) shall in no event cover any federal, state, local or other
taxes imposed upon the Collateral Agent with respect to or measured by its net
income or profits). In any suit, proceeding or action brought by the Collateral
Agent under or with respect to any contract, agreement, interest or obligation
constituting part of the Collateral for any sum owing thereunder, or to enforce
any provisions thereof or of any of the Security Documents or this Agreement,
each of the Credit Parties will save, indemnify and keep the Collateral Agent
harmless from and against all expense, loss or damage suffered by reason of any
defense, setoff, counterclaim, recoupment or reduction of liability whatsoever
of the obligor thereunder, arising out of a breach by any Credit Party of any
obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to or in favor of such obligee or its successors
from such Credit Party, and all such obligations of such Credit Party shall be
and remain enforceable against and only against such Credit Party and shall not
be enforceable against the Collateral Agent.
SECTION 17. Collateral Agent's Lien. Notwithstanding anything to the
contrary in this Agreement, as security for the payment of Collateral Agent Fees
(i) the Collateral Agent is hereby granted a lien upon all the Collateral and
other property and funds held or collected by the Collateral Agent hereunder and
(ii) the Collateral Agent shall have the right to use and apply any of the funds
held by the Collateral Agent in the Collateral Account to cover such Collateral
Agent Fees; provided, that the foregoing is not intended to relieve the Borrower
of its obligation to pay such Collateral Agent Fees.
SECTION 18. Releases. (a) Sales or other dispositions of Collateral
which are not prohibited by the Credit Agreement, the Note Agreement and the
A-Advanced Guaranty shall not require any written or oral release or consent of
the Collateral Agent. Nevertheless, the Borrower shall be entitled to request
upon presentation of a certificate from the Borrower stating that such a sale is
not prohibited by the Credit Agreement, the Note Agreement, the A-Advanced
Guaranty or the Noteholder and A-Advanced Lender Guaranty and Security
Agreement, that the Collateral Agent (i) execute and deliver to the Borrower or
any purchaser of Collateral, a written release, disclaimer or quitclaim of the
Collateral Agent's interest in any such Collateral hereunder and under the
Security Documents, and the Borrower or such purchaser, as the case may be,
shall be entitled to rely conclusively on such release, disclaimer or quitclaim
and/or (ii) redeliver any such Collateral then in the possession of the
Collateral Agent or any agent or nominee thereof. Such request shall be in
writing signed by a Responsible Officer of the Borrower, shall describe the
property to be released in reasonable detail and shall state that such release
is or will not be prohibited by the Credit Agreement, the Note Agreement, the
A-Advanced Guaranty or the Noteholder and A-Advanced Lender Guaranty and
Security Agreement and a copy of which shall be delivered by the Borrower to
each Secured Party. The cancellation and satisfaction of all or any part of the
Secured Documents shall be without prejudice to the rights of the Collateral
Agent to charge and be reimbursed for any expenditures which it may thereafter
incur in connection therewith.
(b) Sales or other dispositions of Collateral which are prohibited by
any of the Credit Agreement, the Note Agreement, the A-Advanced Guaranty or the
Noteholder and A-Advanced Lender Guaranty and Security Agreement, shall require
the written consent of the Collateral Agent. Such consent shall be given by the
14
Collateral Agent (i) at the direction of the Administrative Agent (acting on
behalf of and as instructed by the Required Lenders and, if required by the
terms of the Credit Agreement, the Issuing Bank) in any case when such sale or
disposition is not permitted by Credit Agreement, (ii) at the direction of the
Required Second Lien Holders in any case when such sale or disposition is not
permitted by the Note Agreement or the Noteholder and A-Advanced Lender Guaranty
and Security Agreement.
(c) The notices, statements, directions and certificates requested
under or required by this Section 18 (together with any required certificate of
a Responsible Officer) shall be full authority for and direction to the
Collateral Agent to execute and deliver the releases, disclaimers, quitclaims
and other instruments referred to in this Section 18. The Collateral Agent in so
doing shall have no liability to any Person.
SECTION 19. Exculpatory Provisions. (a) The Collateral Agent shall
not be responsible in any manner whatsoever for the correctness of any recitals,
statements, representations or warranties herein or in the Security Documents,
all of which are made solely by the Credit Parties. The Collateral Agent makes
no representations as to the value or condition of the Collateral or any part
thereof, or as to the title of the Credit Parties thereto or as to the security
afforded by this Agreement or the Security Documents, or as to the validity,
execution (except its own execution), enforceability, legality or sufficiency of
this Agreement, the Security Documents or the Secured Obligations, and the
Collateral Agent shall incur no liability or responsibility in respect of any
such matters. The Collateral Agent shall not be responsible for insuring the
Collateral or for the payment of taxes, charges or assessments or discharging of
liens upon the Collateral or otherwise as to the maintenance of the Collateral,
except that if the Collateral Agent takes possession of any Collateral, the
Collateral Agent shall use reasonable care in the preservation of the Collateral
in its possession.
(b) The Collateral Agent shall not be required to ascertain or
inquire as to the performance by the Credit Parties of any of the covenants or
agreements contained herein, in the Security Documents or in any Secured
Document. Whenever it is necessary, or in the reasonable opinion of the
Collateral Agent advisable, for the Collateral Agent to ascertain the amount of
Secured Obligations then held by Secured Parties, the Collateral Agent may rely
on a certificate of (i) all of the Noteholders in the case of Note Obligations,
(ii) the Administrative Agent in the case of Lender Obligations or (iii) the
A-Advanced Lender in the case of the A-Advanced Guaranty Obligations, and if the
Noteholders, the Administrative Agent or the A-Advanced Lender shall not give
such information to the Collateral Agent, the Noteholders, the Administrative
Agent or the A-Advanced Lender (as the case may be) shall not be entitled to
receive distributions hereunder.
(c) The Collateral Agent shall be under no obligation or duty to take
any action under this Agreement or the Security Documents if taking such action
(i) would subject the Collateral Agent to a tax in any jurisdiction where it is
not then subject to a tax, or would require the Collateral Agent to qualify to
do business in any jurisdiction where it is not then so qualified, unless the
Collateral Agent receives security or indemnity satisfactory to it against such
tax (or equivalent liability), or any liability resulting from such
qualification, in each case which results from the taking of such action under
15
this Agreement or the Security Documents or (ii) would subject the Collateral
Agent to in personam jurisdiction in any location where it is not then so
subject.
(d) Notwithstanding any other provision of this Agreement, the
Collateral Agent shall not be personally liable for any action taken or omitted
to be taken by it in accordance with this Agreement or the Security Documents
except for its own breach, negligence, bad faith or willful misconduct.
(e) The Collateral Agent shall have the same rights with respect to
any Secured Obligation held by it as any other Secured Party and may exercise
such rights as though it were not the Collateral Agent hereunder, and may accept
deposits from, lend money to and generally engage in any kind of banking or
trust business with the Credit Parties as if it were not the Collateral Agent.
(f) Subject to the provisions of this Agreement and the Security
Documents concerning the Collateral Agent's duty of care with respect to
Collateral in the Collateral Agent's possession, the Collateral Agent shall not
be personally liable for any acts, omissions, errors of judgment or mistakes of
fact or law made, taken or omitted to be made or taken by it in accordance with
this Agreement or any Security Documents (including, without limitation, acts,
omissions, errors or mistakes with respect to the Collateral), except for those
arising out of or in connection with the Collateral Agent's gross negligence,
bad faith or willful misconduct.
SECTION 20. Resignation and Removal of the Collateral Agent. (a) The
Collateral Agent may at any time, by giving written notice to the Borrower, the
Administrative Agent, the A-Advanced Lender and the Noteholders, resign and be
discharged of the responsibilities hereby created, such resignation to become
effective upon (i) the appointment of a successor Collateral Agent by the
Required Secured Parties and, so long as no Event of Default has occurred and is
continuing, consented to by the Borrower, such consent not to be unreasonably
withheld, and (ii) the acceptance of such appointment by such successor
Collateral Agent. If no successor Collateral Agent shall be appointed and shall
have accepted such appointment within 90 days after the date the Collateral
Agent gives the aforesaid notice of resignation, the Collateral Agent may apply
to any court of competent jurisdiction to appoint a successor Collateral Agent
to act until such time, if any, as a successor Collateral Agent shall have been
appointed as provided in this Section 20. Any successor so appointed by such
court shall immediately and without further act be superseded by any successor
Collateral Agent appointed by the Required Secured Parties. The Required Secured
Parties may, at any time remove the Collateral Agent and appoint a successor
Collateral Agent, such removal to be effective upon the acceptance of such
appointment by the successor Collateral Agent, which successor Collateral Agent
shall, so long as no Event of Default shall have occurred and be continuing, be
consented to by the Borrower, such consent not to be unreasonably withheld. Any
resigning or removed Collateral Agent shall be entitled to Collateral Agent Fees
to the extent incurred or arising, or relating to events occurring, before such
resignation or removal.
(b) If at any time the Collateral Agent shall resign or be removed or
otherwise become incapable of acting, or if at any time a vacancy shall occur in
the office of the Collateral Agent for any other cause, a successor Collateral
Agent may be appointed by the Required Secured Parties (subject to the
Borrower's consent when required by Section 20(a)), and the powers, duties,
16
authority and title, of the predecessor Collateral Agent shall be terminated and
canceled without procuring the resignation of such predecessor and without any
formality (except as may be required by applicable law) other than appointment
and designation of a successor by the Required Secured Parties in writing duly
acknowledged and delivered to the predecessor and each of the Administrative
Agent, the Noteholders and the A-Advanced Lender. Such appointment and
designation shall be full evidence of the right and authority to make the same
and of all the facts therein recited, and this Agreement and the Security
Documents shall vest in such successor, without any further act, deed or
conveyance, all the estates, properties, rights, powers, trusts, duties,
authority and title of its predecessor; but such predecessor shall,
nevertheless, on the written request of the Required Secured Parties, the Credit
Parties or the successor Collateral Agent execute and deliver an instrument
transferring to such successor all the estates, properties, rights, powers,
trusts, duties, authority and title of such predecessor hereunder and under the
Security Documents and shall deliver all Collateral held by it or its agents to
such successor Collateral Agent. Should any deed, conveyance or other instrument
in writing from the Credit Parties be required by any successor Collateral Agent
for more fully and certainly vesting in such successor the estates, properties,
rights, powers, trusts, duties, authority and title vested or intended to be
vested in the predecessor Collateral Agent, any and all such deeds, conveyances
and other instruments in writing shall, on request of such successor, be
executed, acknowledged and delivered by the Credit Parties. If the Credit
Parties shall not have executed and delivered any such deed, conveyance or other
instrument within 10 days after it received a written request from the successor
Collateral Agent to do so, or if a Notice of Default is in effect, the
predecessor Collateral Agent may execute the same on behalf of the Credit
Parties. The Credit Parties hereby appoint any predecessor Collateral Agent as
their agent and attorney to act for them as provided in the preceding sentence.
SECTION 21. Status of Successor Collateral Agent. Every successor
Collateral Agent appointed pursuant to Section 20 hereof shall be a bank or
trust company in good standing and having power to act as Collateral Agent
hereunder, shall be incorporated under the laws of the United States of America
or any State thereof or the District of Columbia and having its principal
corporate office within the 48 contiguous States and shall also have capital,
surplus and undivided profits of not less than $100,000,000, if there be such an
institution with such capital, surplus and undivided profits willing, qualified
and able to accept the duties hereunder upon reasonable or customary terms.
SECTION 22. Co-Collateral Agent; Separate Collateral Agents. (a) If
at any time or times it shall be necessary or prudent in order to conform to any
law of any jurisdiction in which any of the Collateral shall be located, or to
avoid any violation of law or imposition on the Collateral Agent of taxes by
such jurisdiction not otherwise imposed on the Collateral Agent, or the
Collateral Agent shall be advised by counsel, satisfactory to it, that it is
necessary or prudent in the interest of the Secured Parties, or the Required
Secured Parties shall in writing so request the Collateral Agent, or the
Collateral Agent shall deem it desirable for its own protection in the
performance of its duties hereunder or under the Security Documents, then in any
such case the Collateral Agent, the Administrative Agent, each Noteholder, the
A-Advanced Lender and each of the Credit Parties shall execute and deliver all
instruments and agreements necessary or proper to constitute another bank or
trust company, or one or more Persons approved by the Collateral Agent, either
to act as co-Collateral Agent or co-Collateral Agents of all or any of the
Collateral under this Agreement or under the Security Documents, jointly with
17
the Collateral Agent originally named herein or therein or any successor
Collateral Agent, or to act as separate Collateral Agent or Collateral Agents of
any of the Collateral. If the Credit Parties shall not have joined in the
execution of such instruments and agreements within 10 days after they receive a
written request from the Collateral Agent to do so, or if a Notice of Default
has been delivered and not been rescinded, the Collateral Agent may act under
the foregoing provisions of this Section 22 without the concurrence of the
Credit Parties and execute and deliver such instruments and agreements on behalf
of the Credit Parties. The Credit Parties hereby appoint the Collateral Agent as
its agent and attorney to act for them under the foregoing provisions of this
Section 22 in either of such contingencies.
(b) Every separate Collateral Agent and every co-Collateral Agent,
other than any successor Collateral Agent appointed pursuant to Section 20
hereof, shall, to the extent permitted by law, be appointed and act and be such,
subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred upon
the Collateral Agent in respect of the custody, control and management of
moneys, papers or securities shall be exercised solely by the Collateral Agent
or any agent appointed by the Collateral Agent;
(ii) all rights, powers, duties and obligations conferred or
imposed upon the Collateral Agent hereunder and under the Security Documents
shall be conferred or imposed and exercised or performed by the Collateral Agent
and such separate Collateral Agent or separate Collateral Agents or
co-Collateral Agent or co-Collateral Agents, jointly, as shall be provided in
the instrument appointing such separate Collateral Agent or separate Collateral
Agents or co-Collateral Agent or co-Collateral Agents, except to the extent that
under any law of any jurisdiction in which any particular act or acts are to be
performed, the Collateral Agent shall be incompetent or unqualified to perform
such act or acts, or unless the performance of such act or acts would result in
the imposition of any tax on the Collateral Agent which would not be imposed
absent such joint act or acts, in which event such rights, powers, duties and
obligations shall be exercised and performed, by such separate Collateral Agent
or separate Collateral Agents or co-Collateral Agent or co-Collateral Agents;
(iii) no power given hereby or by the Security Documents to, or
which it is provided herein or therein may be exercised by, any such
co-Collateral Agent or co-Collateral Agents or separate Collateral Agent or
separate Collateral Agents, shall be exercised hereunder or thereunder by such
co-Collateral Agent or co-Collateral Agents or separate Collateral Agent or
separate Collateral Agents except jointly with, or with the consent in writing
of, the Collateral Agent, anything contained herein to the contrary
notwithstanding;
(iv) no Collateral Agent hereunder shall be personally liable by
reason of any act or omission of any other Collateral Agent hereunder; and
(v) the Collateral Agent, at any time by an instrument in
writing executed by it, may accept the resignation of or remove any such
separate Collateral Agent or co-Collateral Agent and, in that case by an
instrument in writing executed by it, may appoint a successor to such separate
18
Collateral Agent or co-Collateral Agent, as the case may be, anything contained
herein to the contrary notwithstanding.
(c) Notwithstanding any other provisions of this Agreement to the
contrary, no separate Collateral Agent or co-Collateral Agent appointed at the
direction or request of the Required Secured Parties may be removed or
discharged with respect to such duties without the written consent of the
Required Secured Parties.
SECTION 23. Treatment of Payee or Endorsee by Collateral Agents;
Representatives of Secured Parties. (a) The Collateral Agent may treat the
registered holder or, if none, the actual holder of any promissory note or
debenture evidencing a Secured Obligation as the absolute owner thereof for all
purposes and shall not be affected by any notice to the contrary, whether such
promissory note or debenture shall be past due or not.
(b) Any Person (other than the Administrative Agent, any Noteholder
or the A-Advanced Lender), which shall be designated as the duly authorized
representative of one or more Secured Parties to act as such in connection with
any matters pertaining to this Agreement, the Security Documents or the
Collateral shall present to the Collateral Agent such documents as the
Collateral Agent may reasonably require in order to demonstrate to the
Collateral Agent the authority of such Person to act as the representative of
such Secured Parties.
SECTION 24. Notices. Unless otherwise specified herein, all notices,
requests, demands or other communications given to the Credit Parties, the
Collateral Agent, the Administrative Agent, any Noteholder or the A-Advanced
Lender shall be given in writing (including telecopy or similar writing) and
shall be addressed at its address specified on the signature pages hereof or any
other address designated by notice given in accordance with this Section 24 to
the party sending such communication. Each such notice, request or other
communication shall be effective and deemed received (i) if given by telecopy,
when such telecopy is transmitted to the telecopy number specified on the
signature pages hereof, (ii) if given by mail, the fifth Business Day after such
communication is deposited in the mail with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means, when delivered at
the address specified on the signature pages hereof; provided, that any notice,
request or demand to the Collateral Agent shall not be effective until actually
received by the Collateral Agent at the office designated by it pursuant to this
Section 24.
SECTION 25. No Waivers. No failure on the part of the Collateral
Agent, any co-Collateral Agents, any separate Collateral Agents, the
Administrative Agent, any Noteholder, the A-Advanced Lender or any other Secured
Party to exercise, no course of dealing with respect to, and no delay in
exercising, any right, power or privilege under this Agreement or the Security
Documents shall operate as a waiver thereof nor shall any single or partial
exercise of any such right, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
SECTION 26. Amendments, Supplements and Waivers. (a) With the written
consent of (i) the Administrative Agent (acting on behalf of and as instructed
by the Required Lenders and, if required by the terms of the Credit Agreement,
the Issuing Bank) and (ii) the Required Second Lien Holders, the Collateral
Agent and the Borrower may, at any time and from time to time, enter into
19
written agreements supplemental hereto for the purpose of adding to or waiving
any provision of this Agreement or changing in any manner the rights of the
Collateral Agent, the Secured Parties or the Credit Parties hereunder; provided
that the separate written consent of the A-Advanced Lender shall be required in
connection with any amendments, supplements or waivers that (i) amends the
provisions of this Section 26 or the definition of A-Advanced Lender or
Noteholders hereunder, (ii) adversely affects the voting percentages, priority
or pari passu rights to the Collateral of the A-Advanced Guaranty Obligations as
such Obligations relate to the Note Obligations or (iii) adversely affects the
rights of the A-Advanced Lender unless the rights of the Noteholders are also
adversely affected and the adverse impact on the A-Advanced Lender is not
disproportionately worse than the adverse impact on the Noteholders. Any such
supplemental agreement shall be binding upon the Credit Parties, the
Administrative Agent, the Noteholders, the A-Advanced Lender, any other Secured
Parties and the Collateral Agent and their respective successors.
(b) Without the consent of the Secured Parties, the Collateral Agent
and any of the Credit Parties may, at any time and from time to time, enter into
one or more additional Security Documents or one or more agreements supplemental
hereto or to the Security Documents, in form satisfactory to the Collateral
Agent, (i) to add to the covenants of the Credit Parties for the benefit of the
Secured Parties or to surrender any right or power herein conferred upon the
Credit Parties, (ii) to mortgage to the Collateral Agent any property or assets
as additional security for the Secured Obligations, or (iii) to cure any
ambiguity, to correct or supplement any provision herein or in the Security
Documents which may be defective or inconsistent with any other provision herein
or therein, or to make any other provision with respect to matters or questions
arising hereunder which other provision shall not be inconsistent with any
provision hereof; provided, however, that any such action contemplated by this
clause (iii) shall not adversely affect the interests of the Secured Parties.
SECTION 27. Headings. Headings of Sections and subsections have been
included herein for convenience only and should not be considered in
interpreting this Agreement.
SECTION 28. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 29. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of each of the parties hereto and shall inure to
the benefit of each of the Secured Parties and their respective successors and
assigns, and nothing herein is intended or shall be construed to give any other
Person any right, remedy or claim under, to or in respect of this Agreement, the
Security Documents or any Collateral.
SECTION 30. GOVERNING LAW. EXCEPT AS OTHERWISE REQUIRED BY MANDATORY
PROVISIONS OF LAW, THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
20
SECTION 31. Counterparts. This Agreement may be signed in any number
of counterparts with the same effect as if the signatures thereto and hereto
were upon the same instrument.
SECTION 32. Termination. (a) Upon (i) receipt by the Collateral Agent
of satisfactory evidence that all the Secured Obligations have been paid, the
commitments under the Credit Agreement have terminated in their entirety and no
Letter of Credit (as defined in the Credit Agreement) is outstanding and (ii)
payment in full of all Collateral Agent Fees, the security interest created by
Section 17 hereof and the Security Documents shall terminate forthwith (along
with this Agreement) and all right, title and interest of the Collateral Agent
in and to the Collateral shall revert to the Credit Parties and their successors
and assigns; provided, that the provisions of Sections 15 and 16 shall not be
affected by any such termination.
(b) Upon the termination of the Collateral Agent's security interest
and the release of the Collateral in accordance with this Section 32, the
Collateral Agent will promptly at the Borrower's written request and expense,
(i) execute and deliver to the Borrower such documents as the Borrower shall
reasonably request to evidence the termination of such security interest or the
release of the Collateral and (ii) deliver or cause to be delivered to the
Credit Parties all property of the Credit Parties then held by the Collateral
Agent or any agent thereof.
SECTION 33. Interpleader. If at any time the Collateral Agent
determines it to be appropriate, the Collateral Agent may commence an action in
interpleader in order to obtain a judicial resolution of the relevant issues
which are in dispute. Such interpleader action shall be brought in the courts of
the State of New York unless the Collateral Agent is advised by independent
counsel retained by the Collateral Agent that, due to the pendency of an action
in another jurisdiction with respect to which the Collateral Agent is a party
and which relates to this Agreement, the Security Documents or the Collateral,
such action should be brought in such other jurisdiction.
[SIGNATURE PAGES FOLLOW]
21
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Collateral Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Syndication Agency Services
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Syndication Agency Services
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
WACHOVIA BANK, NATIONAL ASSOCIATION,
as A-Advanced Lender and as a Noteholder
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
By:
--------------------------------------------------
Name:
Title:
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
NOTEHOLDERS:
THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA, as a Noteholder
By:
--------------------------------------------------
Name:
Title:
Address: The Prudential Insurance Company of
America
c/o Prudential Capital Group
Four ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Trade Management Group
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Address: c/o Prudential Capital Group
Corporate and Project Workouts
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Managing Director
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY, as a Noteholder
By:
--------------------------------------------------
Name:
Title:
Address: c/o ▇▇▇▇▇ ▇▇▇▇▇▇ & Co., Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy:
C.M. LIFE INSURANCE
COMPANY, as a Noteholder
By:
--------------------------------------------------
Name:
Title:
Address: c/o ▇▇▇▇▇ ▇▇▇▇▇▇ & Co., Inc
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
PW WILLOW FUND LLC, as a Noteholder
By:
----------------------------------------------
Name:
Title:
Address: PFPC c/o ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:____________________
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Bond Street Capital
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:____________________
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
BANK ONE, NA, as a Noteholder
By: /s/ C. ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
Name: C. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: First Vice President
Address: Fourth Floor
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: C. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
GENERAL ELECTRIC CAPITAL CORPORATION, as a Noteholder
By:
-------------------------------------------------
Name:
Title:
Address: c/o Commercial Finance
▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ STRATEGIC INVESTMENTS, L.P.,
as a Noteholder
By:
-------------------------------------------------
Name:
Title:
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ STRATEGIC INVESTMENTS III, L.P.,
as a Noteholder
By:
-------------------------------------------------
Name:
Title:
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT H
FORM OF CONTRIBUTION AGREEMENT
This CONTRIBUTION AGREEMENT (as amended, supplemented or otherwise
modified, renewed or replaced from time to time in accordance with the terms
hereof, the "Agreement") is entered into as of October __, 2002 by and among
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc. (the "Borrower"), and each of the Guarantors whose
signature appears at the foot hereof (collectively referred to as the
"Contributors" and individually, as a "Contributor"), for the purpose of
establishing the respective rights and obligations of contribution among the
Contributors and the Borrower in connection with the Credit Agreement.
Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Credit Agreement.
WHEREAS, the Borrower and the Contributors are parties to that
certain Credit, Security, Guaranty and Pledge Agreement dated as of October __,
2002 (as said agreement may hereafter be amended, amended and restated,
supplemented or otherwise modified, renewed or replaced from time to time in
accordance with its terms, the "Credit Agreement") among the Borrower, the
Guarantors referred to therein, the Lenders referred to therein (the "Lenders")
and Wachovia Bank, National Association, as Administrative Agent, Collateral
Agent and Issuing Bank, pursuant to which the Lenders have agreed, subject to
the terms and conditions set forth in the Credit Agreement, to make loans and
extend other financial accommodations to the Borrower;
WHEREAS, pursuant to the Credit Agreement, the Contributors have
guaranteed the Obligations;
WHEREAS, pursuant to the terms of the Credit Agreement, each of the
Borrower and the Contributors has granted to the Collateral Agent (for the
benefit of the Secured Parties (as defined therein)) a security interest in the
Collateral as security for their respective obligations under the Credit
Agreement; and
WHEREAS, as a result of the transactions contemplated by the Credit
Agreement, the Borrower and the Contributors will benefit, directly and
indirectly, from the Obligations and in consideration thereof desire to enter
into this Agreement to allocate such benefits among themselves and to provide a
fair and equitable arrangement to make contributions in the event that any
payment is made by a Contributor under the Credit Agreement, or in the event
that the Collateral Agent, on behalf of the Secured Parties, exercises recourse
against any of the Collateral owned by a Contributor (such payment or recourse
being referred to herein as a "Contribution").
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the Borrower and the Contributors hereby agree as follows:
SECTION 1. Contribution. In order to provide for just and equitable contribution
among the Borrower and the other Contributors in the event any Contribution is
made by a Contributor (a "Funding Contributor") under the Credit Agreement, that
Funding Contributor shall be entitled to a contribution from the other
Contributors and the Borrower for all payments, damages and expenses incurred by
that Funding Contributor in discharging any of the Obligations, in the manner
and to the extent set forth in this Agreement. The amount of any Contribution
under this Agreement shall be equal to the payment made by the Funding
Contributor pursuant to the Credit Agreement or the fair saleable value of the
Funding Contributor's portion of the Collateral against which recourse is
exercised, and shall be determined as of the date on which such payment is made
or recourse is exercised, as the case may be.
SECTION 2. Benefit Amount Defined. For purposes of this Agreement, the "Benefit
Amount" of any Contributor as of any date of determination shall be the net
value of the benefits to such Contributor from extensions of credit made by the
Lenders and/or the Issuing Bank to the Borrower under the Credit Agreement. Such
benefits shall include (without limitation) benefits of funds constituting
proceeds of Loans which are deposited into the accounts of the Borrower by the
Lenders which are in turn advanced or contributed by the Borrower to such
Contributor (collectively, the "Benefits"). In the case of any proceeds of Loans
or Benefits advanced or contributed to, or received by, a Person, any of the
equity interests of which are owned directly or indirectly by a Contributor (an
"Owned Entity"), the Benefit Amount of such Contributor with respect thereto
shall be that portion of the net value of the benefits attributable to Loans or
Benefits advanced or contributed to the Owned Entity equal to the direct or
indirect percentage ownership of such Contributor in its Owned Entity.
SECTION 3. Contribution Obligation. The Borrower shall be liable to a Funding
Contributor for the full amount of Obligations paid by such Funding Contributor.
Each Contributor shall be liable to a Funding Contributor in an amount equal to
the greater of (A) the product of (i) a fraction the numerator of which is the
Benefit Amount of such Contributor, and the denominator of which is the total
amount of Obligations and (ii) the amount of Obligations paid by such Funding
Contributor and (B) 95% of the excess of the fair saleable value of the property
of such Contributor over the total liabilities of such Contributor (including
the maximum amount reasonably expected to become due in respect of contingent
liabilities), as the case may be, determined as of the date on which the payment
made by a Funding Contributor is deemed made for purposes of this Agreement or
any recourse is exercised against any Funding Contributor's portion of the
Collateral, as the case may be (giving effect to all payments made by other
Funding Contributors and to the exercise of recourse against any other Funding
Contributor's portion of the Collateral as of such date in a manner to maximize
the amount of such contributions).
SECTION 4. Allocation. In the event that at any time there exists more than one
Funding Contributor with respect to any Contribution (in any such case, the
"Applicable Contribution"), then payment from other Contributors pursuant to
this Agreement shall be allocated among such Funding Contributors in proportion
to the total amount of the Contribution made for or on account of the Borrower
by each such Funding Contributor pursuant to the Applicable Contribution. In the
event that at any time any Contributor pays an amount under this Agreement in
excess of the amount calculated pursuant to clause (A) of Section 3 hereof, that
Contributor shall be deemed to be a Funding Contributor to the extent of such
2
excess and shall be entitled to contribution from the other Contributors
(including the Borrower) in accordance with the provisions of this Agreement.
SECTION 5. Subrogation. Any payments made hereunder by the Borrower shall be
credited against amounts payable by the Borrower pursuant to any subrogation
rights of the Contributors which received such payments under this Agreement.
SECTION 6. Preservation of Rights. This Agreement shall not limit any right that
any Contributor may have against any other Person which is not a party hereto.
SECTION 7. Subsidiary Payment. The amount of Contribution payable under this
Agreement by any Contributor shall be reduced by the amount of any contribution
paid hereunder by a Subsidiary of such Contributor.
SECTION 8. Equitable Allocation. If as a result of any reorganization,
recapitalization, or other change in the Borrower or any Affiliate or Subsidiary
of the Borrower, or as a result of any amendment, waiver or modification of the
terms and conditions governing the Credit Agreement or the Obligations, or for
any other reason, the Contributions under this Agreement become inequitable, the
parties hereto shall promptly modify and amend this Agreement to provide for an
equitable allocation of the Contributions. Any of the foregoing modifications
and amendments to this Agreement shall be in writing and signed by all parties
hereto.
SECTION 9. Asset of Party to Which Contribution is Owing. The parties hereto
acknowledge that the right to contribution hereunder shall constitute an asset
in favor of the party to which such Contribution is owing.
SECTION 10. Subordination. No payments payable by a Contributor or by the
Borrower pursuant to the terms hereof shall be paid until all Commitments under
the Credit Agreement have been terminated, all amounts outstanding under any
promissory notes issued thereunder have been indefeasibly paid in full, all
amounts outstanding under all Letters of Credit issued under the Credit
Agreement shall have been indefeasibly reimbursed in full, all issued but
undrawn Letters of Credit have expired or been terminated or canceled and all
other Obligations have been indefeasibly paid in full (the date on which all of
the foregoing occur shall be referred to herein as the "Termination Date").
Nothing contained in this Agreement shall affect the Obligations or the
obligations of any party hereto to any Lender under the Credit Agreement or any
other Fundamental Document.
SECTION 11. Successors and Assigns; Amendments. This Agreement shall be binding
upon each party hereto and its respective successors and assigns and shall inure
to the benefit of the parties hereto and their respective successors and
assigns, and in the event of any transfer or assignment of rights by a
Contributor, the rights and privileges herein conferred upon that Contributor
shall automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof. Except as specifically required
under Section 8 hereof, this Agreement shall not be amended without the prior
written consent of the Administrative Agent.
SECTION 12. Termination. This Agreement shall remain in effect, and shall not be
terminated until the Termination Date.
3
SECTION 13. Conflict. In the event of a conflict between this Agreement and the
Credit Agreement, the provisions of the Credit Agreement will govern.
SECTION 14. CHOICE OF LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH,
AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK.
SECTION 15. Counterparts. This Agreement, and any modifications or amendments
hereto may be executed in any number of counterparts, each of which when so
executed and delivered shall constitute an original for all purposes, but all
such counterparts taken together shall constitute but one and the same
instrument.
SECTION 16. Effectiveness. This Agreement shall become effective on the date on
which all of the parties hereto shall have executed this Agreement.
[SIGNATURE PAGE FOLLOWS]
4
IN WITNESS WHEREOF, the undersigned parties have caused this
Agreement to be duly executed as of the day and year first written above.
BORROWER:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
By:
-----------------------------------------
Name:
Title:
GUARANTORS:
CURTAINS AND FABRICS, INC.
GOLD ▇▇▇▇▇, INC.
RASCHEL FASHION INTERKNITTING, LTD.
GFD FABRICS, INC.
GFD SERVICES, INC.
MEXICAN INDUSTRIES OF
NORTH CAROLINA, INC.
▇▇▇▇▇▇▇ LACES, LTD.
ADVISORY RESEARCH SERVICES, INC.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (MICHIGAN), INC.
GUILFORD AIRMONT, INC.
GOLD MILL FARMS, INC.
GMI COMPUTER SALES, INC.
TWIN RIVERS TEXTILE PRINTING AND
FINISHING
By:
-----------------------------------------
Name:
Title:
5
EXHIBIT I
FORM OF PATENT SECURITY AGREEMENT
---------------------------------
WHEREAS, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc., a Delaware corporation (the
"Borrower") and each of the Guarantors whose signature appears at the foot
hereof (as hereinafter defined) (the Borrower and the Guarantors are
collectively referred to as the "Pledgors"), now own or hold or may hereafter
acquire or hold Patents (defined as all of the following: all United States and
foreign patents and patent applications, whether now existing or hereafter
arising or acquired and all reissues, continuations, continuations-in-part or
extensions thereof) including, without limitation, the Patents listed on
Schedule A annexed hereto, as such Schedule may be amended from time to time by
the addition of Patents subsequently arising or acquired;
WHEREAS, each Pledgor is a party to a Credit, Security, Guaranty and
Pledge Agreement dated as of October 1, 2002 (as the same may be amended,
supplemented or otherwise modified, renewed or replaced from time to time, the
"Credit Agreement") among such Pledgor, the lenders referred to therein (the
"Lenders"), Wachovia Bank, National Association as Administrative Agent and
Issuing Bank and Wachovia Bank, National Association as Collateral Agent for the
benefit of the Secured Parties defined in the Credit Agreement (the "Collateral
Agent"), to which reference is made for definitions of capitalized terms used
and not otherwise defined herein;
WHEREAS, pursuant to the terms of the Credit Agreement, each Pledgor
has granted to the Collateral Agent (for the benefit of the Secured Parties) a
security interest in all of such Pledgor's right, title and interest in and to
personal property including, without limitation, all right, title and interest
of such Pledgor in, to and under all of the Pledgor's Patents and licenses to
use Patents held by others (including, without limitation, those Patent licenses
listed on Schedule B hereto), whether presently existing or hereafter arising or
acquired, and all products and proceeds thereof and all income therefrom,
including, without limitation, any and all causes of action which exist now or
may exist in the future by reason of any infringement or dilution of any Patent
or Patent license for the full term of the Patents, to secure the due and
punctual payment and performance of the Obligations.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Pledgor does, as security for
the due and punctual payment and performance of the Obligations, hereby grant to
the Collateral Agent (for the benefit of the Secured Parties) a continuing
security interest in all of such Pledgor's right, title and interest in, to and
under the following (all of the following items or types of property being
collectively referred to herein as the "Patent Collateral"), whether presently
existing or hereafter arising or acquired:
(i) each Patent, including, without limitation, each Patent and
Patent application referred to in Schedule A annexed hereto;
(ii) each Patent license, including, without limitation, each Patent
license referred to in Schedule B annexed hereto, to the extent such Patent
license does not prohibit the licensee from assigning or granting a security
interest in its rights thereunder; and
(iii) all products and proceeds of, and income from, any of the
foregoing, including, without limitation, any claim by the Pledgor against third
parties for past, present or future infringement or dilution of any Patent or
any Patent licensed under any Patent license.
Each Pledgor agrees to deliver updated copies of Schedule A and
Schedule B to the Collateral Agent at the end of any quarter in which the
Pledgor applies for the registration of, registers or otherwise acquires any
Patent not listed on Schedule A hereto or enters into any Patent license not
listed on Schedule B hereto, and to duly and promptly execute and deliver, or
have duly and promptly executed and delivered, at the cost and expense of such
Pledgor, such further instruments or documents (in form and substance
satisfactory to the Collateral Agent), and promptly perform, or cause to be
promptly performed, any and all acts, in all cases, as may be necessary, proper
or advisable from time to time, in the reasonable judgment of the Collateral
Agent, to carry out the provisions and purposes of Article 8 of the Credit
Agreement and this Patent Security Agreement, and to provide, perfect and
preserve the Liens (as defined in the Credit Agreement) of the Collateral Agent
for the benefit of the Secured Parties under the Credit Agreement, the
Fundamental Documents (as defined in the Credit Agreement) and this Patent
Security Agreement, in the Patent Collateral or any portion thereof.
Each Pledgor agrees that if any person, firm, corporation or other
entity shall do or perform any acts which the Collateral Agent believes
constitute an infringement of any Patent which is the subject of this Patent
Security Agreement, or violate or infringe any right of a Pledgor or the Lenders
therein or if any person, firm, corporation or other entity shall do or perform
any acts which the Collateral Agent believes constitute an unauthorized or
unlawful use thereof, then and in any such event, upon 30 days' prior written
notice to such Pledgor (or if an Event of Default is continuing, then without
such notice), the Collateral Agent may and shall have the right to take such
steps and institute such suits or proceedings as the Collateral Agent may deem
advisable or necessary to prevent such acts and conduct and to secure damages
and other relief by reason thereof, and to generally take such steps as may be
advisable or necessary or proper for the full protection of the rights of the
parties. The Collateral Agent may take such steps or institute such suits or
proceedings in its own name or in the name of each Pledgor or in the names of
the parties jointly. The Collateral Agent hereby agrees to give such Pledgor
notice of any steps taken, or any suits or proceedings instituted, by the
Collateral Agent pursuant to this paragraph.
This security interest is granted in conjunction with the security
interests granted to the Collateral Agent (for the benefit of the Lenders)
pursuant to the Credit Agreement. Each Pledgor does hereby further acknowledge
and affirm that the rights and remedies of the Collateral Agent (for the benefit
of the Lenders) with respect to the security interest in the Patent Collateral
made and granted hereby are subject to, and are more fully set forth in, the
Credit Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein.
2
This Patent Security Agreement is made for collateral purposes only.
At such time as all of the Obligations shall have been fully and indefeasibly
repaid in full and performed, all the Commitments under the Credit Agreement
(including any Commitment to issue any Letter of Credit) shall have terminated
and all Letters of Credit issued under the Credit Agreement shall have expired
or been terminated or cancelled, the Collateral Agent (on behalf of the Secured
Parties) shall execute and deliver to each Pledgor, at such Pledgor's expense,
without representation, warranty or recourse, all releases and reassignments,
termination statements and other instruments as may reasonably be requested in
order to terminate the security interest of the Collateral Agent (for the
benefit of the Lenders) in the Patent Collateral, subject to any disposition
thereof which may have been made by the Collateral Agent pursuant to the terms
hereof or of the Credit Agreement.
So long as no Event of Default shall have occurred and be continuing,
and subject to the various provisions of the Credit Agreement and the other
Fundamental Documents to which it is a party, each Pledgor may use the Patent
Collateral in any lawful manner.
THIS PATENT SECURITY AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WHICH ARE
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE.
3
IN WITNESS WHEREOF, the Pledgor has caused this Patent Security
Agreement to be duly executed as of September __, 2002.
PLEDGORS:
BORROWER:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
By:
------------------------------
Name:
Title:
GUARANTORS:
CURTAINS AND FABRICS, INC.
GOLD ▇▇▇▇▇, INC.
RASCHEL FASHION INTERKNITTING,
LTD.
GFD FABRICS, INC.
GFD SERVICES,INC.
MEXICAN INDUSTRIES OF
NORTH CAROLINA, INC.
▇▇▇▇▇▇▇ LACES, LTD.
ADVISORY RESEARCH SERVICES, INC.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (MICHIGAN), INC.
GUILFORD AIRMONT, INC.
GOLD MILL FARMS, INC.
GMI COMPUTER SALES, INC.
TWIN RIVERS TEXTILE PRINTING AND
FINISHING
By:
------------------------------
Name:
Title:
ACCEPTED:
WACHOVIA BANK,
NATIONAL ASSOCIATION
as Collateral Agent
By:
------------------------------
Name:
Title:
▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
: ss.:
COUNTY OF NEW YORK )
On the ____ day of October, in the year 2002, before me personally
came ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, to me known, who, being by me sworn, did say that he or
she is the Interim CFO of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc., which corporation is described
in, and executed, the above instrument, and that he or she signed his or her
name by order of the Board of Directors of said corporation.
-----------------------------------
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the ____ day of October, in the year 2002, before me personally
came ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, to me known, who, being by me sworn, did say that he or
she is the Interim CFO of each of the Guarantors defined herein, which
corporation is described in, and executed, the above instrument, and that he or
she signed his or her name by order of the Board of Directors of said
corporation.
-----------------------------------
Notary Public
5
STATE OF )
: ss.:
COUNTY OF )
On the ____ day of ________________, in the year 2002, before me
personally came _____________________, to me known, who, being by me sworn, did
say that he or she is the ___________________________ of Gold ▇▇▇▇▇, Inc., which
corporation is described in, and executed, the above instrument, and that he or
she signed his or her name by order of the Board of Directors of said
corporation.
-----------------------------------
Notary Public
STATE OF )
: ss.:
COUNTY OF )
On the ____ day of ________________, in the year 2002, before me
personally came _____________________, to me known, who, being by me sworn, did
say that he or she is the ___________________________ of Raschel Fashion
Interknitting, Ltd., which corporation is described in, and executed, the above
instrument, and that he or she signed his or her name by order of the Board of
Directors of said corporation.
-----------------------------------
Notary Public
6
STATE OF )
: ss.:
COUNTY OF )
On the ____ day of ________________, in the year 2002, before me
personally came _____________________, to me known, who, being by me sworn, did
say that he or she is the ___________________________ of GFD Fabrics, Inc.,
which corporation is described in, and executed, the above instrument, and that
he or she signed his or her name by order of the Board of Directors of said
corporation.
-----------------------------------
Notary Public
STATE OF )
: ss.:
COUNTY OF )
On the ____ day of ________________, in the year 2002, before me
personally came _____________________, to me known, who, being by me sworn, did
say that he or she is the ___________________________ of GFD Services, Inc.,
which corporation is described in, and executed, the above instrument, and that
he or she signed his or her name by order of the Board of Directors of said
corporation.
-----------------------------------
Notary Public
7
STATE OF )
: ss.:
COUNTY OF )
On the ____ day of ________________, in the year 2002, before me
personally came _____________________, to me known, who, being by me sworn, did
say that he or she is the ___________________________ of Mexican Industries of
North Carolina, Inc., which corporation is described in, and executed, the above
instrument, and that he or she signed his or her name by order of the Board of
Directors of said corporation.
-----------------------------------
Notary Public
STATE OF )
: ss.:
COUNTY OF )
On the ____ day of ________________, in the year 2002, before me
personally came _____________________, to me known, who, being by me sworn, did
say that he or she is the ___________________________ of ▇▇▇▇▇▇▇ Laces, Ltd.,
which corporation is described in, and executed, the above instrument, and that
he or she signed his or her name by order of the Board of Directors of said
corporation.
-----------------------------------
Notary Public
8
STATE OF )
: ss.:
COUNTY OF )
On the ____ day of ________________, in the year 2002, before me
personally came _____________________, to me known, who, being by me sworn, did
say that he or she is the ___________________________ of Advisory Research
Services, Inc., which corporation is described in, and executed, the above
instrument, and that he or she signed his or her name by order of the Board of
Directors of said corporation.
-----------------------------------
Notary Public
STATE OF )
: ss.:
COUNTY OF )
On the ____ day of ________________, in the year 2002, before me
personally came _____________________, to me known, who, being by me sworn, did
say that he or she is the ___________________________ of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Michigan), Inc., which corporation is described in, and executed, the above
instrument, and that he or she signed his or her name by order of the Board of
Directors of said corporation.
-----------------------------------
Notary Public
9
STATE OF )
: ss.:
COUNTY OF )
On the ____ day of ________________, in the year 2002, before me
personally came _____________________, to me known, who, being by me sworn, did
say that he or she is the ___________________________ of Guilford Airmont, Inc.,
which corporation is described in, and executed, the above instrument, and that
he or she signed his or her name by order of the Board of Directors of said
corporation.
-----------------------------------
Notary Public
STATE OF )
: ss.:
COUNTY OF )
On the ____ day of ________________, in the year 2002, before me
personally came _____________________, to me known, who, being by me sworn, did
say that he or she is the ___________________________ of Gold Mill Farms, Inc.,
which corporation is described in, and executed, the above instrument, and that
he or she signed his or her name by order of the Board of Directors of said
corporation.
-----------------------------------
Notary Public
10
STATE OF )
: ss.:
COUNTY OF )
On the ____ day of ________________, in the year 2002, before me
personally came _____________________, to me known, who, being by me sworn, did
say that he or she is the ___________________________ of GMI Computer Sales,
Inc., which corporation is described in, and executed, the above instrument, and
that he or she signed his or her name by order of the Board of Directors of said
corporation.
-----------------------------------
Notary Public
STATE OF )
: ss.:
COUNTY OF )
On the ____ day of ________________, in the year 2002, before me
personally came _____________________, to me known, who, being by me sworn, did
say that he or she is the ___________________________ of Twin Rivers Textile
Printing and Finishing, which corporation is described in, and executed, the
above instrument, and that he or she signed his or her name by order of the
Board of Directors of said corporation.
-----------------------------------
Notary Public
11
Schedule A to
Patent Security Agreement
-------------------------
PATENTS AND APPLICATIONS FOR PATENTS
Owner Patent No. Title of Invention Issue Date
----- ---------- ------------------ ----------
Schedule B to
Patent Security Agreement
-------------------------
PATENT LICENSES
EXHIBIT J
FORM OF TRADEMARK SECURITY AGREEMENT
(TRADEMARKS, TRADEMARK REGISTRATIONS,
TRADEMARK APPLICATIONS AND TRADEMARK LICENSES)
WHEREAS, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC., a Delaware corporation (the
"Borrower"), and each of the Guarantors referred to in the Credit Agreement (as
hereinafter defined) (the Borrower and the Guarantors are collectively referred
to as the "Pledgors"), now own or hold or may hereafter acquire or hold
Trademarks (defined as all of the following: all trademarks, service marks,
trade names, corporate names, company names, business names, fictitious business
names, trade dress, logos, other source of business identifiers and general
intangibles of like nature, now existing or hereafter adopted or acquired, all
registrations and recordings thereof or similar property rights, and all
applications in connection therewith, including, without limitation,
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
state thereof or any other country or any political subdivision thereof, and all
reissues, extensions or renewals thereof) including, without limitation, the
Trademarks listed on Schedule A annexed hereto, as such Schedule may be amended
from time to time by the addition of Trademarks subsequently registered or
otherwise adopted or acquired;
WHEREAS, each Pledgor is party to a Credit, Security, Guaranty and
Pledge Agreement dated as of October 1, 2002 (as the same may be amended,
supplemented or otherwise modified, renewed or replaced from time to time, the
"Credit Agreement") among the Borrower, the Guarantors referred to therein (the
"Guarantors"), the Lenders referred to therein (the "Lenders"), Wachovia Bank,
National Association as Administrative Agent and Issuing Bank, and Wachovia
Bank, National Association as Collateral Agent for the Secured Parties defined
therein (the "Collateral Agent"), to which reference is made for definitions of
capitalized terms used and not otherwise defined herein;
WHEREAS, pursuant to the terms of the Credit Agreement, each of the
Pledgors has granted to the Collateral Agent (for the benefit of the Secured
Parties) a security interest in all personal property of such Pledgor including,
without limitation, all right, title and interest of such Pledgor in, to and
under all of such Pledgor's Trademarks and Trademark licenses (including,
without limitation, those Trademark licenses listed on Schedule B hereto),
whether presently existing or hereafter arising, adopted or acquired, together
with the goodwill of the business connected with, and symbolized by, the
Trademarks and all products and proceeds thereof and all income therefrom,
including, without limitation, any and all causes of action which exist now or
may exist in the future by reason of infringement or dilution thereof or injury
to the associated goodwill, to secure the payment of the Obligations (such term
being used herein as defined in the Security Agreement);
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Pledgor does, as security for
the Obligations, hereby grant to the Collateral Agent (for the benefit of the
Secured Parties) a continuing security interest in all of such Pledgor's right,
title and interest in, to and under the following (all of the following items or
types of property being collectively referred to herein as the "Trademark
Collateral"), whether presently existing or hereafter arising or acquired:
(i) each Trademark and all of the goodwill of the business connected
with the use of, and symbolized by, each Trademark, including, without
limitation, each Trademark referred to in Schedule A annexed hereto;
(ii) each Trademark license, including, without limitation, each
Trademark license referred to in Schedule B annexed hereto, to the extent such
Trademark license does not prohibit the licensee from assigning or granting a
security interest in its rights thereunder; and
(iii) all products and proceeds of, and income from, any of the
foregoing, including, without limitation, any claim by any Pledgor against third
parties for the past, present or future infringement or dilution of any
Trademark or any Trademark licensed under any Trademark license, or for injury
to the goodwill associated with any Trademark.
Each Pledgor agrees to deliver updated copies of Schedule A and
Schedule B to the Collateral Agent at the end of any quarter in which such
Pledgor registers or otherwise adopts or acquires any Trademark not listed on
Schedule A hereto or enters into any Trademark license not listed on Schedule B
hereto, and to duly and promptly execute and deliver, or have duly and promptly
executed and delivered, at the cost and expense of the Pledgors, such further
instruments or documents (in form and substance satisfactory to the Collateral
Agent), and promptly perform, or cause to be promptly performed, any and all
acts, in all cases, as may be necessary, proper or advisable from time to time,
in the reasonable judgment of the Collateral Agent, to carry out the provisions
and purposes of Article 8 of the Credit Agreement and this Trademark Security
Agreement, and to provide, perfect and preserve the Liens (as defined in the
Credit Agreement) of the Collateral Agent for the benefit of the Secured Parties
under the Security Agreement and this Trademark Security Agreement, in the
Trademark Collateral or any portion thereof.
Each Pledgor agrees that if any person, firm, corporation or other
entity shall do or perform any acts which the Collateral Agent believes
constitute an infringement of any Trademark, or violate or infringe any right of
a Pledgor or the Lenders therein or if any person, firm, corporation or other
entity shall do or perform any acts which the Collateral Agent believes
constitute an unauthorized or unlawful use thereof, then and in any such event,
upon 30 days' prior written notice to such Pledgor while an Event of Default (as
defined in the Credit Agreement) is continuing, the Collateral Agent may and
shall have the right to take such steps and institute such suits or proceedings
as the Collateral Agent may deem advisable or necessary to prevent such acts and
conduct and to secure damages and other relief by reason thereof, and to
generally take such steps as may be advisable or necessary or proper for the
full protection of the rights of the parties. The Collateral Agent may take such
steps or institute such suits or proceedings in its own name or in the name of
the applicable Pledgor or in the names of the parties jointly. The Collateral
Agent hereby agrees to give the applicable Pledgor notice of any steps taken, or
any suits or proceedings instituted, by the Collateral Agent pursuant to this
paragraph.
2
This security interest is granted in conjunction with the security
interests granted to the Collateral Agent (for the benefit of the Secured
Parties) pursuant to the Credit Agreement. Each Pledgor does hereby further
acknowledge and affirm that the rights and remedies of the Collateral Agent (for
the benefit of the Secured Parties) with respect to the security interest in the
Trademark Collateral made and granted hereby are subject to, and more fully set
forth in, the Credit Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein.
This Trademark Security Agreement is made for collateral purposes
only. At such time as all of the Obligations have been indefeasibly repaid in
full, all the Commitments under the Credit Agreement (including any commitment
to issue any Letter of Credit) shall have terminated and all Letters of Credit
issued under the Credit Agreement shall have expired or been terminated or
cancelled, the Collateral Agent (on behalf of the Secured Parties), shall
execute and deliver to such Pledgors, at Borrower's or the applicable Pledgor's
expense, without representation, warranty or recourse, all releases and
reassignments, termination statements and other instruments as may be necessary
or proper to terminate the security interest of the Collateral Agent (for the
benefit of the Secured Parties) in the Trademark Collateral, subject to any
disposition thereof which may have been made by the Collateral Agent pursuant to
the terms hereof or of the Credit Agreement.
So long as no Event of Default shall have occurred and be continuing,
and subject to the various provisions of the Credit Agreement and the other
Fundamental Documents to which it is a party, each Pledgor may use, license and
exploit the Trademark Collateral in any lawful manner.
THIS TRADEMARK SECURITY AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK.
3
IN WITNESS WHEREOF, the Pledgors have caused this Trademark
Security Agreement to be duly executed as of October
__, 2002.
PLEDGORS:
BORROWER:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
By:
--------------------------------------
Name:
Title:
GUARANTORS:
CURTAINS AND FABRICS, INC.
GOLD ▇▇▇▇▇, INC.
RASCHEL FASHION INTERKNITTING,
LTD.
GFD FABRICS,INC.
GFD SERVICES,INC.
MEXICAN INDUSTRIES OF
NORTH CAROLINA, INC.
▇▇▇▇▇▇▇ LACES, LTD.
ADVISORY RESEARCH SERVICES, INC.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (MICHIGAN), INC.
GUILFORD AIRMONT, INC.
GOLD MILL FARMS, INC.
GMI COMPUTER SALES, INC.
TWIN RIVERS TEXTILE PRINTING AND
FINISHING
By:
--------------------------------------
Name:
Title:
ACCEPTED:
WACHOVIA BANK,
NATIONAL ASSOCIATION
as Collateral Agent
By:
--------------------------------------
Name:
Title:
▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
: ss.:
COUNTY OF NEW YORK )
On the ____ day of October, in the year 2002, before me personally
came ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, to me known, who, being by me sworn, did say that s/he is
the Interim CFO of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc., which corporation is described in, and
which corporation executed the above instrument, and that s/he signed his/her
name by order of the Board of Directors of said corporation.
-----------------------------------
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the ____ day of October, in the year 2002, before me personally
came ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, to me known, who, being by me sworn, did say that s/he is
the Interim CFO of each of the Guarantors defined herein, which corporation is
described in, and which corporation executed the above instrument, and that s/he
signed his/her name by order of the Board of Directors of said corporation.
-----------------------------------
Notary Public
5
STATE OF ______________ )
: ss.:
COUNTY OF ____________ )
On the ____ day of __________, in the year 2002, before me personally
came _____________________, to me known, who, being by me sworn, did say that
s/he is the ____________ of Gold ▇▇▇▇▇, Inc., which corporation is described in,
and which corporation executed the above instrument, and that s/he signed
his/her name by order of the Board of Directors of said corporation.
-----------------------------------
Notary Public
STATE OF ______________ )
: ss.:
COUNTY OF ____________ )
On the ____ day of __________, in the year 2002, before me personally
came _____________________, to me known, who, being by me sworn, did say that
s/he is the ____________ of Raschel Fashion Interknitting, Ltd., which
corporation is described in, and which corporation executed the above
instrument, and that s/he signed his/her name by order of the Board of Directors
of said corporation.
-----------------------------------
Notary Public
6
STATE OF ______________ )
: ss.:
COUNTY OF ____________ )
On the ____ day of __________, in the year 2002, before me personally
came _____________________, to me known, who, being by me sworn, did say that
s/he is the ____________ of GFD Fabrics, Inc., which corporation is described
in, and which corporation executed the above instrument, and that s/he signed
his/her name by order of the Board of Directors of said corporation.
-----------------------------------
Notary Public
STATE OF ______________ )
: ss.:
COUNTY OF ____________ )
On the ____ day of __________, in the year 2002, before me personally
came _____________________, to me known, who, being by me sworn, did say that
s/he is the ____________ of GFD Services, Inc., which corporation is described
in, and which corporation executed the above instrument, and that s/he signed
his/her name by order of the Board of Directors of said corporation.
-----------------------------------
Notary Public
7
STATE OF ______________ )
: ss.:
COUNTY OF ____________ )
On the ____ day of __________, in the year 2002, before me personally
came _____________________, to me known, who, being by me sworn, did say that
s/he is the ____________ of Mexican Industries of North Carolina, Inc., which
corporation is described in, and which corporation executed the above
instrument, and that s/he signed his/her name by order of the Board of Directors
of said corporation.
-----------------------------------
Notary Public
STATE OF ______________ )
: ss.:
COUNTY OF ____________ )
On the ____ day of __________, in the year 2002, before me personally
came _____________________, to me known, who, being by me sworn, did say that
s/he is the ____________ of ▇▇▇▇▇▇▇ Laces, Ltd., which corporation is described
in, and which corporation executed the above instrument, and that s/he signed
his/her name by order of the Board of Directors of said corporation.
-----------------------------------
Notary Public
8
STATE OF ______________ )
: ss.:
COUNTY OF ____________ )
On the ____ day of __________, in the year 2002, before me personally
came _____________________, to me known, who, being by me sworn, did say that
s/he is the ____________ of Advisory Research Services, Inc., which corporation
is described in, and which corporation executed the above instrument, and that
s/he signed his/her name by order of the Board of Directors of said corporation.
-----------------------------------
Notary Public
STATE OF ______________ )
: ss.:
COUNTY OF ____________ )
On the ____ day of __________, in the year 2002, before me personally
came _____________________, to me known, who, being by me sworn, did say that
s/he is the ____________ of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Michigan), Inc., which corporation
is described in, and which corporation executed the above instrument, and that
s/he signed his/her name by order of the Board of Directors of said corporation.
-----------------------------------
Notary Public
9
STATE OF ______________ )
: ss.:
COUNTY OF ____________ )
On the ____ day of __________, in the year 2002, before me personally
came _____________________, to me known, who, being by me sworn, did say that
s/he is the ____________ of Guilford Airmont, Inc., which corporation is
described in, and which corporation executed the above instrument, and that s/he
signed his/her name by order of the Board of Directors of said corporation.
-----------------------------------
Notary Public
STATE OF ______________ )
: ss.:
COUNTY OF ____________ )
On the ____ day of __________, in the year 2002, before me personally
came _____________________, to me known, who, being by me sworn, did say that
s/he is the ____________ of Gold Mill Farms, Inc., which corporation is
described in, and which corporation executed the above instrument, and that s/he
signed his/her name by order of the Board of Directors of said corporation.
-----------------------------------
Notary Public
10
STATE OF ______________ )
: ss.:
COUNTY OF ____________ )
On the ____ day of __________, in the year 2002, before me personally
came _____________________, to me known, who, being by me sworn, did say that
s/he is the ____________ of GMI Computer Sales, Inc., which corporation is
described in, and which corporation executed the above instrument, and that s/he
signed his/her name by order of the Board of Directors of said corporation.
-----------------------------------
Notary Public
STATE OF ______________ )
: ss.:
COUNTY OF ____________ )
On the ____ day of __________, in the year 2002, before me personally
came _____________________, to me known, who, being by me sworn, did say that
s/he is the ____________ of Twin Rivers Textile Printing and Finishing, which
corporation is described in, and which corporation executed the above
instrument, and that s/he signed his/her name by order of the Board of Directors
of said corporation.
-----------------------------------
Notary Public
11
Schedule A to Trademark
Security Agreement
------------------
TRADEMARKS
Application Registration Registration Description of
Country Owner No. No. Date Trademark Goods
------- ----- ----------- ------------- -------------- --------- ---------
Schedule B to Trademark
Security Agreement
------------------
TRADEMARK LICENSES
EXHIBIT K
FORM OF ACCOUNT CONTROL AGREEMENT
ACCOUNT CONTROL AGREEMENT dated as of October 1, 2002 (as amended,
supplemented or otherwise modified, renewed or replaced, the "Agreement") among
(i) WACHOVIA BANK, NATIONAL ASSOCIATION, as collateral agent for the Secured
Parties, as defined below (in such capacity, the "Collateral Agent"), (ii)
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC. (the "Pledgor"), and (iii) [____________________] (the
"Bank").
Introductory Statement
----------------------
The Bank has established a deposit account, Account No. __________,
in the name of the Pledgor (the "Account").
The Pledgor has granted to the Collateral Agent on behalf of the
Secured Parties a security interest in, among other things, the Account pursuant
to a (i) Credit, Security, Guaranty and Pledge Agreement, dated as of October 1,
2002 (as such agreement may be amended, supplemented or otherwise modified,
renewed or replaced from time to time, the "Credit Agreement"), among the
Pledgor, the guarantors referred to therein, the lenders referred to therein
(the "Lenders") and Wachovia Bank, National Association, as Issuing Bank,
Administrative Agent, and Collateral Agent for the Lenders (in such capacity,
the "Administrative Agent") and (ii) Guaranty, Security and Pledge Agreement,
dated as of September 30, 2002 (as such agreement may be amended, supplemented
or otherwise modified, renewed or replaced from time to time, the "Security
Agreement"), among the Pledgor, the guarantors referred to therein, the
A-Advanced Lender referred to therein (the "A-Advanced Lender"), the noteholders
referred to therein (the "Noteholders") and Wachovia Bank, National Association,
as Collateral Agent for the A-Advanced Lender and the Noteholders (together with
the Lenders, the A-Advanced Lender, the Noteholders and the Administrative
Agent, the "Secured Parties").
The Collateral Agent, the Pledgor and the Bank are entering into this
Agreement to provide for the control of the Account by the Collateral Agent and
to perfect the security interest of the Collateral Agent on behalf of the
Secured Parties in the Account.
Accordingly, the parties hereby agree as follows:
1. The Account. The Bank hereby represents and warrants to the
Collateral Agent and the Pledgor that (i) the Account has been established in
the name of the Pledgor as recited above, (ii) the Account is a demand deposit
account and any balance in the Account is the valid and legally binding
obligation of the Bank and (iii) except for the claims and interest of the
Collateral Agent on behalf of the Secured Parties and the Pledgor in the Account
(subject to any claim in favor of the Bank permitted under Section 2), the Bank
does not know of any claim to or interest in the Account. All funds at any time
on deposit in the Account shall be held by the Bank subject to the terms of this
Agreement. All parties agree that the Account is a "deposit account" within the
meaning of Article 9 of the Uniform Commercial Code of the State of New York
(the "UCC").
2. Priority of Lien. The Bank hereby acknowledges the security
interest granted to the Collateral Agent on behalf of the Secured Parties by the
Pledgor. The Bank hereby waives and releases all liens, encumbrances, claims and
rights of set off it may have, now or in the future, against the Account other
than for the payment of the Bank's customary fees, commissions and other charges
pursuant to its agreement with the Pledgor. Except as required by applicable
law, the Bank will not agree with the Pledgor or any third party that the Bank
will comply with payment orders concerning the Account originated by the Pledgor
or such third party without the prior written consent of the Collateral Agent.
3. Control.
(a) The Bank shall comply with all withdrawal or other notifications
it receives directing it to transfer any property in the Account and any other
instructions concerning the Account (each, a "payment order") originated by the
Pledgor or the Pledgor's authorized representatives until such time as the
Collateral Agent delivers a written notice to the Bank that the Collateral Agent
is thereby exercising exclusive control over the Account. Such notice is
referred to herein as a "Notice of Exclusive Control" and shall be substantially
in the form of Exhibit A attached hereto. For the benefit of the Pledgor, the
Collateral Agent agrees that it shall deliver a Notice of Exclusive Control only
after the occurrence and during the continuance of an Event of Default (as
defined in the Credit Agreement or the Subordinated Credit Agreement).
(b) Upon receipt by the Bank of a Notice of Exclusive Control, the
Bank shall (i) cease complying with payment orders originated by the Pledgor or
its representatives and cease distributing interest on property in the Account
to the Pledgor, and (ii) comply with all payment orders and other instructions
concerning the Account originated by the Collateral Agent or its
representatives.
(c) The Bank shall be entitled to rely upon any Notice of Exclusive
Control and, after receipt of a Notice of Exclusive Control, any payment order,
that the Bank reasonably believes to be from the Collateral Agent.
4. Statements, Confirmations and Notices of Adverse Claims. After
receipt by the Bank of a Notice of Control and, prior to such time, at the
request of the Collateral Agent, the Bank shall send copies of all statements
and confirmations concerning the Account to each of the Pledgor and the
Collateral Agent at its notice address set forth below. If any person or entity
asserts any lien, encumbrance or adverse claim against the Account or in any
financial asset carried therein, the Bank will promptly notify the Collateral
Agent and the Pledgor thereof.
5. Limited Responsibility of the Bank. The Bank shall have no
responsibility or liability to the Collateral Agent for complying with payment
orders concerning the Account from the Pledgor or the Pledgor's authorized
2
representatives which are received by the Bank before the Bank receives a Notice
of Exclusive Control. The Bank shall have no responsibility or liability to the
Pledgor for complying with a Notice of Exclusive Control or complying with
payment orders concerning the Account originated by the Collateral Agent after
receipt of a Notice of Exclusive Control, and shall have no responsibility to
investigate the appropriateness of any such payment order or Notice of Exclusive
Control, even if the Pledgor notifies the Bank that the Collateral Agent is not
legally entitled to originate any such payment order or Notice of Exclusive
Control. This Agreement does not create any obligation or duty of the Bank other
than those expressly set forth herein.
6. Tax Reporting. All items of income, gain, expense and loss
recognized in the Account shall be reported to the Internal Revenue Service and
all state and local taxing authorities under the name and taxpayer
identification number of the Pledgor.
7. Customer Agreement. In the event of a conflict between this
Agreement and any other agreement between the Bank and the Pledgor, the terms of
this Agreement shall prevail.
8. Termination. This Agreement shall continue in effect until the
Collateral Agent has notified the Bank in writing that this Agreement, or its
security interest in the Account, is terminated. Upon receipt of such notice,
the obligations of the Bank under Sections 1, 2, 3 and 4 above with respect to
the operation and maintenance of the Account shall terminate, the Collateral
Agent shall have no further right to originate payment orders concerning the
Account and any previous Notice of Exclusive Control delivered by the Collateral
Agent shall be deemed to be of no further force and effect.
9. Complete Agreement. This Agreement and the instructions and
notices required or permitted to be executed and delivered hereunder set forth
the entire agreement of the parties with respect to the subject matter hereof,
and supersede any prior agreement and contemporaneous oral agreements of the
parties concerning its subject matter.
10. Amendments. No amendment, modification or (except as otherwise
specified in Section 8 above) termination of this Agreement, nor any assignment
of any rights hereunder (except to the extent contemplated under Section 13
below), shall be binding on any party hereto unless it is in writing and is
signed by each of the parties hereto, and any attempt to so amend, modify,
terminate or assign except pursuant to such a writing shall be null and void. No
waiver of any rights hereunder shall be binding on any party hereto unless such
waiver is in writing and signed by the party against whom enforcement is sought.
11. Indemnity.
(a) The Pledgor agrees to indemnify and hold the Bank and its
officers, directors, employees and agents (the "Indemnified Parties") harmless
from and against any losses, liabilities and damages incurred by the Indemnified
Parties as a consequence of any action taken or omitted to be taken by it in the
performance of its obligations hereunder, with the exception of any losses,
liabilities and damages arising as a result of the Bank's gross negligence or
willful misconduct.
3
(b) With respect to actions taken or omitted to be taken pursuant to
instructions of the Collateral Agent not authorized or contemplated pursuant to
the terms of this Agreement, the Collateral Agent shall indemnify and hold the
Indemnified Parties harmless against any losses, liabilities, and damages
incurred by the Indemnified Parties as a consequence of such actions or
omissions, with the exception of any losses, liability and damages arising as a
result of the Bank's gross negligence or willful misconduct.
12. Severability. If any term or provision set forth in this
Agreement shall be invalid or unenforceable, the remainder of this Agreement
shall be construed in all respects as if such invalid or unenforceable term or
provision were omitted.
13. Successors. The terms of this Agreement shall be binding upon,
and shall inure to the benefit of, the parties hereto and their respective
successors or assigns. This Agreement may be assigned by the Collateral Agent to
any successor of the Collateral Agent pursuant to the Intercreditor Agreement
(as defined in the Credit Agreement), provided that written notice thereof is
given by the Collateral Agent to the Bank.
14. Notices. Except as otherwise expressly provided herein, any
notice, order, instruction, request or other communication required or permitted
to be given under this Agreement shall be in writing and deemed to have been
properly given when delivered in person, or when sent by telecopy or other
electronic means and electronic confirmation of error free receipt is received
or upon receipt of notice sent by certified or registered United States mail,
return receipt requested, postage prepaid, addressed to the party at the address
set forth below (or such other address as may be specified in a notice in the
manner set forth above):
If to the Collateral Agent:
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Pledgor:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Bank:
--------------------
--------------------
Attention: _______________
Facsimile: _______________
4
15. Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing and delivering one or more
counterparts.
16. Choice of Law. Regardless of any provision in any other agreement
relating to the Account, the parties hereto agree that the establishment and
maintenance of the Account, and all interest, duties and obligations with
respect to the Account, shall be governed by the law of the State of New York.
With respect to the Account, the Bank's "jurisdiction" for purposes of Section
9-304 of the UCC is the State of New York.
[Signature Page Follows]
5
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, inc., as Pledgor
By:
---------------------------------------------------
Name:
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION, as Collateral Agent
By:
---------------------------------------------------
Name:
Title:
[____________________], as Bank
By:
--------------------------------------------------
Name:
Title:
6
EXHIBIT A
NOTICE OF EXCLUSIVE CONTROL
[Letterhead of Collateral Agent]
Date: __________, 200__
To: ____________________
____________________
____________________
Attention: _______________
Facsimile: _______________
RE: Pledged Account No. ____________________, in the name of
[Applicable Credit Party].
This is to notify [Bank] that the above-referenced pledged collateral
account (the "Account") is now under the exclusive control of Wachovia Bank,
National Association, as Collateral Agent for certain creditors (the "Collateral
Agent"). [Bank] is hereby instructed to cease complying with instructions given
by or on behalf of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc. relating to the Account, to cease
distributing interest earned on property in the Account and to refuse to accept
any other instructions from ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc. intended to exercise any
authority with respect to the Account unless instructed by the Collateral Agent.
All future instructions on the Account shall be given solely on
behalf of the Collateral Agent.
7